📊 100 watchdogs vs. $10B+ industry...who wins?

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Former CFTC enforcement director Ian McGinley told CNBC this week that prediction markets "have existed for decades." True. But they've never looked like this.

Sports contracts now make up 90% of prediction market volume. Billions flowing through platforms tied to games, elections, everything. And the agency overseeing it all? Under 100 people in enforcement, according to McGinley.

The insider trading problem is real. The SEC spent decades building surveillance tools for stocks. The CFTC? Not so much. McGinley insists the agency "does have the ability to police these markets" but admits staffing is a critical weakness. Under 100 enforcers for a billion-dollar industry. Not exactly reassuring.

The lawsuits keep stacking. Kalshi, Crypto.com, and Robinhood are all in active litigation. Coinbase just sued regulators in three states. Arizona tried to revoke Underdog's fantasy license just for partnering with Crypto.com.

One quick way to combat potential legal infringement is by geofencing. Voluntarily pulling out of services in certain locations before regulators force them to. Crypto.com stopped sports contracts in five states. DraftKings launched in 38 states, but only 17 allow sports. FanDuel? Just 5.

Still, the money keeps flowing. 12 new DCM applications in 2025, marking a 500% spike from 2024. A DCM, or Designated Contract Market, is the CFTC license that lets you legally run a prediction market in the US.

Can the CFTC even regulate sports contracts? It depends on whether they count as "swaps" under the Commodity Exchange Act. A Nevada court said no, ruling these are just bets on outcomes, not financial instruments the CFTC oversees. Kalshi's appealing.

If that ruling holds, prediction markets might pivot. Instead of game outcomes like "Will the Lakers beat the Celtics?,” expect contracts like "Will LeBron sign with Miami?" Same type of market, different legal footing.

Our prediction: 2026 will be marked by lawsuits, geofencing, and lawyers getting rich, similar to crypto before the current administration. The platforms that survive will be the ones who innovate without getting shut down.

The legal debate around sports related event contracts is increasingly focused on classification. Regulators and courts are asking whether these products qualify as swaps under the Commodity Exchange Act or whether they more closely resemble traditional sports betting.

Crypto.com’s loss in Nevada clarified the risk. The District Court of Nevada ruled that its sports related event contracts did not turn on whether an event would occur, but on how a sporting event would resolve. That distinction placed the contracts outside the CEA’s scope and closer to regulated gaming. The reasoning now under review in Kalshi’s Ninth Circuit appeal is already influencing how operators think about product design.

For designated contract markets, the path forward may lie in redefining what constitutes a sports related event. Markets tied to player signings or season long performance differ meaningfully from game outcome markets and raise different legal questions. While still subject to scrutiny, these contracts are not the ones currently driving enforcement actions.

Our take: Prediction markets will thrive in sports if they stop centering around their identity on game outcomes. The platforms that succeed will be the ones who can evolve the most dynamic product that lives outside of regulatory boundaries. More markets on new events. The platforms that attempt to go against current written regulatory procedure will find themselves fighting an uphill battle.

CoinMarketCap, crypto’s biggest aggregator with ~100 million monthly active visitors, just added prediction markets to their platform. Why is this a big deal?

According to Semrush, Polymarket's website received 10 million visits in November 2025, supporting roughly 450,000 active traders. CoinMarketCap's integration gives the prediction market 10x more visibility, at no acquisition cost. That won't translate to 10x more traders, but even a fraction of that conversion is massive.

Prediction markets have long been crypto's weirder, more niche cousin. Crypto hit $500 billion in weekly volume last year; prediction markets peaked around $5 billion. But with Bitcoin crossing $100,000 and crypto fully normalized, that distinction is starting to feel arbitrary. Now for prediction markets, distribution is the bottleneck as most people still don’t know these platforms exist. CoinMarketCap is helping Polymarket solve that problem and saving them tens of millions of marketing cost along the way.

CoinGecko, CoinMarketCap's main competitor with ~50M monthly visitors, hasn't added prediction markets yet. When they do, that's another massive wave of free distribution for prediction markets.