A Bocconi law professor reads the transatlantic puzzle at the centre of prediction market regulation: US appeals courts are split on whether event contracts are federally regulated derivatives or state-regulated wagers, with the Third Circuit accepting CFTC jurisdiction in April and the Ninth Circuit rejecting it on August 28. Annunziata shows that EU law already lands where the Ninth Circuit landed, treating a contract on a discrete fact like who wins a match as a wager rather than a financial instrument, which is why Belgium, France, Italy, Poland and Romania have blocked access to the platforms. The classification question is a choice between protecting retail savers and letting them speculate, and it is now before the Supreme Court and the European Commission.

In just a few years, prediction markets have gone from obscure tools concentrated in the niche corners of elite policy, academia, intelligence, and analytics communities to rapidly expanding fixtures throughout American economic, political, and cultural life. Roosevelt's Shahrzad Shams maps their embedding into sports, media, and finance — three of the top five US sports leagues now have formal partnerships with prediction market platforms, a quarter of the top 20 media companies integrate their products, and sportsbooks like DraftKings and FanDuel are blurring the line between gambling and trading. Drawing on path dependence theory, she warns that every new partnership narrows the window for meaningful regulation: the longer policymakers wait, the more calcified these arrangements become, and the harder they are to unwind.

Connecticut is the latest state to sue Kalshi, and the pattern is becoming a rout: Nevada, Washington, Michigan, and New York have already cordoned off sports prediction contracts, with New York seeking $36 billion and a court-ordered shutdown. Courts keep rejecting Kalshi's federal preemption defence with the same reasoning — when the product looks like sports betting, states can treat it like sports betting, derivatives wrapper or not. Paige notes the commercial irony: the CFTC keeps intervening on Kalshi's behalf while each state loss shrinks the addressable market its Cantor Fitzgerald institutional channel depends on.

States and Kalshi are warring over whether sports-event contracts are gambling or federally regulated derivatives — and the fight looks headed to the Supreme Court. The Third Circuit sided with Kalshi on CFTC preemption, but the Ninth Circuit, hearing Nevada's challenge, appears poised to create the circuit split that forces the justices to step in. Dieterle walks through the statutory hooks (the 1974 CEA amendments, CFMA 2000, Dodd-Frank) and reads the Court's recent anti-preemption voting patterns to handicap how it would rule — with the major questions doctrine looming as Kalshi's biggest risk.

The CFTC's staff letter makes a novel argument: displaying event contracts in sportsbook odds format (minus 150, plus 200) can itself be a deceptive practice under Rule 180.1, even when every number on screen is accurate. A 60-cent contract and a minus-150 moneyline are the same trade, but the odds format hides the probability, the order book, and who is on the other side. On an exchange, competing traders set the price and the venue takes no position; at a sportsbook, the house writes the line and folds its margin into the number. Regulated exchanges and intermediaries must confirm receipt of the letter by August 31, and enforcement lawyers will know who was told.

Traces prediction markets from Renaissance papal betting through the 2024 election boom, and explains why early attempts like Intrade and Augur failed while Kalshi and Polymarket finally broke through. Covers the saver, gambler, and sharp participant problem at the core of prediction market design, and sketches where the industry is headed: bespoke hedging, perpetual and combinatorial markets, and AI agents.

Mauboussin and Callahan review the wisdom of crowds across prediction markets, sports betting markets, parimutuel betting markets, and the stock market, covering each market's history, accuracy, information aggregation mechanism, and failure modes. The key distinction: the three betting markets are zero-sum before costs, while the stock market has positive expected returns over time. Uses the framework to explain why markets efficiently capture known information and where diversity breakdowns create opportunities for excess returns.

Analyzes 23 million moneyline trades on Kalshi across major sport leagues and finds two systematic ways market prices fail as probabilities. Calibration is not static: parameters sit near perfect-calibration values mid-contract but depart sharply as expiry approaches, with the final ten minutes producing a step-like Prelec curve consistent with insurance-demand behavior by traders holding losing positions. Cross-game parlays are systematically overpriced relative to the product of their leg prices, with overpricing growing in leg count and a separate market-level markup at the parlay-pricing stage. The practical takeaway: treating prediction-market prices as probabilities requires conditioning on time to expiry and product type, not just price.