Sports betting, prediction markets, video-game gambling, and gambling advertisements are often treated as separate issues. For teenagers, however, they increasingly exist in the same digital world. A sports prediction, a loot box, and a betting advertisement can all appear on the same phone—sometimes within minutes of one another. This raises an important question: Should youth protections depend on what a platform calls its product, or on how that product actually functions?
A prediction market allows users to buy contracts based on whether a future event will happen. That event might involve an election, an awards show, the economy, or the outcome of a football game. If the prediction is correct, the contract pays out; if it is wrong, the user loses the money spent on it.
The federal Commodity Futures Trading Commission describes these products as “event contracts” that can be used to predict outcomes or speculate on future events. Because they are structured as financial contracts, prediction markets may be regulated federally instead of through the state gambling systems that oversee sportsbooks. However, when a user puts money on which team will win a game, the experience can look and feel extremely similar to sports betting. (CFTC)
In New York, users must be at least 21 to participate in mobile sports betting. Kalshi, a federally regulated prediction-market platform, permits users who are at least 18 to open accounts. This means an 18-year-old in New York may be unable to place a sports bet through a licensed sportsbook but may be able to trade a contract based on the outcome of the same game. (Kalshi)
New York is currently challenging that distinction. On July 31, 2026, Governor Kathy Hochul and Attorney General Letitia James announced a lawsuit accusing Kalshi of operating an unlicensed gambling platform. The state argues that Kalshi’s sports contracts qualify as gambling and allow users ages 18 through 20 to participate even though they are below New York’s legal age for mobile sports betting. Kalshi’s position has centered on its status as a federally regulated financial exchange. (New York Attorney General)
The disagreement is therefore larger than one company. It concerns whether a sports-related contract should be regulated according to its financial label or according to the activity taking place.
Teenagers do not experience these products as separate legal categories. They see sports-betting promotions on social media, gambling-like features inside video games, and apps that present predictions as trading. The language may change, but each activity can involve risking something valuable for an uncertain reward.
Research cited in the sponsor memo for New York’s No Gambling Ads for Kids Act found that 61 percent of boys ages 11–17 had seen gambling advertisements on YouTube, while 60 percent had encountered them on social media. The memo also states that some young users reported gambling after seeing these advertisements. (New York State Senate)
This exposure matters because the line between gambling, gaming, and financial trading is becoming less visible. Words such as “contracts,” “markets,” and “trading” may make an activity sound more like investing even when a user is still risking money on an uncertain event.
New York lawmakers have already begun treating these activities as parts of the same problem. The State Senate passed the No Gambling Ads for Kids Act by a 60–0 vote on June 1, 2026. The bill would restrict social-media platforms from showing minors advertisements for sports betting, prediction-market wagering, online sweepstakes, traditional online gambling, and gambling-related video-game features. It is currently pending in the Assembly Consumer Affairs and Protection Committee. (New York State Senate)
Other policy approaches being discussed include applying a consistent minimum age to sports betting and sports-related prediction contracts, strengthening identity and age-verification systems, limiting gambling advertisements shown to minors, and teaching students how to recognize the financial and psychological risks connected to gambling-like products. Each approach also raises practical questions involving privacy, federal and state authority, and how broadly gambling-related products should be defined.
The debate over prediction markets shows how quickly technology can blur older legal categories. A sportsbook may call an activity a bet, while a prediction market may call it a trade. For a young user risking money on the outcome of a game, that difference may not be obvious.
As these platforms continue to grow, policymakers face a central question: When two products create similar experiences and risks, should young people receive different protections simply because the products are regulated under different names?
Choices Over Consequences 