Polymarket CEO Shayne Coplan’s claim this week that sportsbooks “rip off” consumers lands at an awkward moment for the prediction market industry he is championing.
While Coplan cast traditional operators as opaque and anti-consumer, rival Kalshi is facing scrutiny over the transparency of its new parlay mechanics. And as the agency courts say should decide the space punts the issue back to the courts, the sports betting operators Coplan calls “scams” are launching their version of the product he touts in new places before Polymarket.
Speaking at the Axios BFD conference on Tuesday, Coplan blasted U.S. sportsbooks for tilting the game against customers and called prediction markets a fairer alternative where traders meet each other, not the house.
“None of them innovate. They all rip off the consumer, respectfully,” Coplan said. “You can only trade against the house. They can ban you if you make money, and they can profile you as a user and change the prices based on you. That’s a scam.”
Parlay mechanics recall transparency concerns
His argument reflects a broader industry claim that exchange models with visible order books and tighter spreads treat customers better than parlay-dependent sportsbooks.
However, the industry’s own products are complicating that pitch. Kalshi’s RFQ-powered parlays have drawn scrutiny after Sportico reported that institutional market makers often hold a pricing edge over retail traders. The outlet cited University College Dublin research that found request-for-quote “takers” tend to receive worse returns than the firms setting the quotes.
Kalshi argues RFQs are standard in derivatives markets and that anyone can use its API. But critics counter that the gap between the company’s “radical transparency” branding and a backend system most users never see raises consumer-protection concerns the CFTC once flagged, as prediction markets introduce the same parlay formats Coplan is criticizing.
Supreme Court may decide fate
Coplan also said he expects the U.S. Supreme Court to decide whether sports contracts fall under federal derivatives law or state gambling codes, a sentiment that has become increasingly common across the industry.
Kalshi, Crypto.com and Robinhood are fighting regulators in multiple states over whether CFTC-regulated contracts preempt state law. Polymarket is not involved in any of those cases as it has not yet fully relaunched in the U.S., although it is running “beta tests” in some places after the Justice Department cleared its path back into the market this summer.
A Nevada federal judge who initially shielded Kalshi from a cease-and-desist order now says he is “leaning toward” reversing that decision and has questioned whether sports results can fit the Commodity Exchange Act’s definition of a swap.
In a separate case, 34 states filed an amicus brief supporting New Jersey’s appeal of a ruling that left the issue up to the CFTC.
CFTC nominee punts to courts
That guidance is not coming from the CFTC any time soon.
At a Senate hearing Wednesday, CFTC chair-nominee Michael Selig largely sidestepped questions about whether sports contracts should be permitted under the agency’s jurisdiction. He indicated that would be decided “by the courts,” or by Congress if lawmakers choose to intervene.
The CFTC has offered little guidance since Kalshi first launched sports markets in January, only weeks before Trump took office. It is operating with only one of its five commissioner seats filled, as the nascent category ramps faster than they can review it.
Wall Street, partners, Trump pile on
If the regulatory picture is murky, the money pouring in is not.
New York Stock Exchange parent Intercontinental Exchange agreed to invest up to $2 billion in Polymarket, valuing the platform at roughly $8 billion and positioning ICE as a distributor of Polymarket’s market-driven data.
Trump-aligned investors have also increased involvement. Donald Trump Jr. advises both Kalshi and Polymarket, and Trump Media partnered with Crypto.com on a Truth Social-branded prediction marketplace.
LSR data shows Kalshi booked over $2.4 billion in sports-contract volume in September, about 90% of its total trading for the month. Meanwhile both companies bolster financial backings with distribution deals across sports and media.
Polymarket recently partnered with Twitter to integrate probabilities and AI analysis directly into the platform’s feeds. PrizePicks, which has fought its own battles of whether its product is actually sports betting, now carries Kalshi contracts in its app, in front of millions of customers who already bet on player-based outcomes.
Polymarket, Kalshi look to leagues
Polymarket and Kalshi both signed multi-year agreements with the NHL. Other leagues are reportedly in discussions with prediction market operators, according to Bloomberg.
At the same time, the NBA and MLB warned the CFTC this summer that prediction markets present significant integrity risks without sportsbook-style oversight. Both leagues met with members of Congress this month after high-profile gambling scandals involving alleged performance manipulation by athletes.
In that context, Coplan’s anti-sportsbook positioning doubles as competitive strategy.
Prediction markets are moving quickly to secure the distribution pipes, league partnerships and media exposure that legitimized sportsbooks after the Supreme Court struck down PASPA, as they brace for their own PASPA moment.
Sportsbooks approach the Rubicon
Traditional operators are preparing their own response.
DraftKings and FanDuel plan to launch sports prediction products next month in states where they cannot operate sportsbooks.
That shift forces a broader question. Prediction markets have flourished largely because the biggest sportsbooks were boxed out of places like California and Texas. Now those same operators are entering the space and targeting the same users with similar products.
The longer Polymarket waits to reenter the U.S., the more it risks losing ground to the companies Coplan calls “scams.” His critique may soon be tested as sportsbooks compete under the same rules he’s fighting to operate under.
