America Needs Better Gambling Policy
I make the case for 4 gambling policies that make common sense to me
I’ve written a lot about why the gambling industry is so attractive to invest in. But I’ve written little about my own moral and political views on the industry.
Here’s how I think about it. Every form of entertainment sits on a spectrum of vice. Reading, playing sports, and listening to music are on one end of the spectrum. Alcohol, tobacco, and hard drugs are on the other end.
Gambling and sports betting sit somewhere along this spectrum – a legitimate form of entertainment with vice elements. Similar to doom-scrolling TikTok, or binging McDonald’s. I believe as an entertainment form progresses on the vice spectrum, we need more guardrails to protect consumers.
I’ve derived so much entertainment value from betting on sports and playing poker at casinos. But at the same time, I believe the gambling industry needs sensible regulation. Right now, the US doesn’t have that.
In the last year, the CFTC essentially opened sports betting to every state and every American 18+ via prediction markets. An uneven patchwork of state laws still regulates the online sportsbook market. Meanwhile, the offshore market has boomed, with more Americans using VPNs to access platforms like Stake. US gambling policy is currently a wild west. But it must be handled delicately.
Basically every gambling founder and CEO I’ve ever met agrees. You’ll rarely hear a regulated-market founder not take responsible gambling seriously. Why? Because founders are genuinely motivated by gambling as a form of entertainment, not a means of exploiting customers. And because they know that if the gambling industry pushes too hard, it risks a Black Friday political event that wrecks the industry.
It’s an opportune time to discuss regulations, for a few reasons. The CFTC is currently seeking public comments on prediction market policy. There are several bills moving through Congress. And AOC has taken aim at prediction markets. In 2026, gambling is very much in the cultural and political zeitgeist.
So I thought it’d be interesting to lay out four gambling policies that make common sense to me.
1. Advertising Limits: When the NBA Playoffs started last week, I watched my first full game of the season. (Which is the subject of another substack). Two things struck me. First, the number of GLP-1 ads. Second, the number of sportsbook ads and branded content during the broadcast. Remember how the NBA and Marvel used to do joint trailers for Playoffs & new movies, like this one for Spider-Man? I almost expected Charles Barkley to star in a Wegovy x DraftKings commercial.
Jokes aside, sports fans don’t want to see betting ads during games. At best it’s annoying to be upsold on your fan experience. At worst it corrupts the purity of the game. More than twice as many Americans support than oppose a “buzzer-to-buzzer” ban (aka a ban on betting ads from the game’s first buzzer to its last). It also feels like, similar to tobacco and alcohol, there should be limits on what a sportsbook can say. It’s misleading to say “$1,000 in free bets.” It’s exploitative to say “I was unable to pay my rent, but I got two years of rent through Kalshi’s predictions.” I recognize micro-affiliates make language tougher to control. But I support some level of advertising restriction.
2. A Brokerage Ban: During March Madness, I got push notifications from Robinhood, Coinbase AND Venmo encouraging me to “trade” on the tournament. I was honestly furious. These are all fintech companies that position themselves as financial management and investment tools. But now they’re actively pushing gambling onto their user base. I get why. Robinhood is tracking to make $435 million in revenue from prediction markets this year.
But a stock brokerage doubling as a sportsbook is dangerous for consumers. If a consumer deposits money into DraftKings, that’s a conscious decision to bet on sports. But if a consumer can shift money from the S&P 500 to March Madness in one frictionless app, all while being told it’s investing, then that’s dangerous. I think there should be a clean separation between brokerages and sports prediction markets, where a company like Robinhood cannot sell equities and sports markets under the same roof.
3. 21+ Requirements: I think the most under-reported story in prediction markets is how Kalshi turned sports betting from 21+ to 18+. Most states require 21+ to make a sportsbook account. But the CFTC requires 18+ to trade on an exchange. All of a sudden, college freshmen can freely bet on sports across the country. Sure, Americans can go to war at 18. But it feels like irresponsible policy if young men can gamble on sports before they ever work a full-time job and learn the value of money. It feels like a time bomb for young men in fraternities.
People who gamble before age 21 are 4x more likely to become problem gamblers later in life. Just as most states decided with OSBs, I think we should limit sports markets to users 21+. TBD if that policy comes from the CFTC, Congress or the exchanges themselves. But if prediction markets are really financial management tools, then everyone should prefer 18-21 users to put their money in the S&P over sports parlays.
4. Market Restrictions: Parlays – or “combos” as Kalshi calls them – are an interesting dilemma. On one hand, they drive the lion’s share of profit for sportsbooks. On the other hand, it’s really hard to joint bet on the Lakers game + Tesla earnings + the presidential election as a financial instrument. If we’re being intellectually honest, prediction markets should limit which events you’re allowed to combine.
I think we also need restrictions on prop bets, especially as you look to smaller sports and more niche bets. If you play for Indiana State’s basketball team, you make $50K/year in NIL money, and you play against Duke, you might feel incentivized to shave a few points to help win a bet. This literally happened in the MLB recently. I think it’s only a matter of time until a scandal hits college, where most players are compensated far less than the pros. The best way to protect the integrity of the game is to limit long-tail markets.
I’ll add a few caveats before I wrap up. First, sports prediction markets are still a live question. The long-term future of sports event contracts will probably be decided by the Supreme Court before Congress. Second, it’s really hard to enact effective policy when there are state, federal and tribal regulatory regimes. It feels like the US gambling industry could benefit from one federal regime, but I understand the many political reasons that’s difficult. Lastly, I’m no political lobbyist with a clear view of what’s feasible to get through Congress. But I am a consumer who enjoys gambling as a form of entertainment, believes the industry should have guardrails, and thinks we can all approach the issue with common sense.
Maybe it also needs less gambling…🤔