New Kalshi-led coalition: SPGA shortcomings a cautionary tale?

The prediction market sector took another major step this week via the formation of the Coalition for Prediction Markets - which has been unveiled as a partnership venture between Kashi and Crypto.com.

In addition to the involvement of these two aforementioned operators, the coalition also includes additional operators Robinhood, Coinbase and Underdog - and is set to be led by two key board executives Matt David and Sara Slane.

Slane's inclusion, in particular, highlights a crucial level of intellectual endorsement - as she has pioneered major sports betting change in the US market over the past decade and is now heavily involved with Kalshi as the company's Head of Corporate Development. As we all know, prediction markets are on a meteoric rise but, as the adage implies; what goes up can also come down. The coalition appears to be here to ensure that doesn't happen.

Speaking exclusively to Global Gaming Insider, a Kalshi spokesperson has underlined the new organization's specific purpose is to "promote and protect the access, transparency, market integrity and consumer safeguards that underpin the prediction market industry."

At first glance, it appears that the coalition will mirror for prediction markets what the SGLA has become for sweepstakes. However, the coalition would hardly want to follow in the footsteps of the flailing sweepstakes sector which, due to intense regulatory pressure, been forced to evolve away from the very 'sweeps' phrase by which it was previously defined.

Learning from the other's mistakes

A year ago, the Social and Promotional Games Association (SPGA) burst onto the scene in fervent defense of the sweepstakes sector - going to the mat with the American Gaming Association (AGA) within months of its initial inception. Its tactic was in no way defense as the best form of attack, but rather more akin to offense is the best form of offense. Within under a year, the association had burned so many bridges that it found itself on an isolated island - dissolving to become part of the Social and Promotional Gaming Association in September.

Sweepstakes and prediction markets are inherently different, but what unites them is revolutionary potential paired with fierce regulatory pushback at state level. As such, the coalition will have to not only choose its battles but also choose how to battle them. Being at odds with a number of state regulators feels inevitable, but the coalition will need to build bridges where they can - and remain amicable where they cannot.

Our Kalshi spokesperson further underlines, "Prediction markets are quickly becoming a mainstream tool in America. We want to promote and protect access to these platforms." Despite differing ideologies, the coalition will surely want to retain some kind of peace with the association if it wants to achieve these outlined goals.

With regard to the regulatory battlefield, the coalition remains under the blanket of federal protection from the CFTC - whose silence over the past 12 months has spoken volumes. Kalshi has further chosen to outline the educative purpose of the new coalition, stating that its role will also be to "Its role will also be to educate the public about how prediction markets differ from casinos and sportsbooks. With prediction markets, there is no house, and no penalty for winning.

"Recent attacks against the industry aren't about protecting consumers; they're about protecting monopolies. The best way to protect consumers is to ensure that prediction markets remain federally regulated, with consistent guardrails and policies."

Place your predictions: Polymarket exclusion prideful or practical?

Despite being comprised of some of the most influential and sizeable operators in the prediction market sector, the Coalition for Prediction Markets has stepped into the limelight with some notable omissions. None more so than Polymarket.

Before launching into conspiracy theory, Polymarket's absence could simply be explained by the fact that the current compilation of operators is an all-US line-up - and Polymarket does not currently operate within the market. This explanation, however, does not account for perhaps the second-most notable absentee in PrizePicks, which operates almost exclusively in the US market.

PrizePicks' expansion into the prediction market space is, though, more recent, and the company remains a primarily DFS facing brand. Similar can be said for FanDuel and DraftKings, who cast off from the AGA in favor of prediction markets last month, only to be followed this week by Fanatics. These updates, combined with the formation of this coalition, represent a major shift in the dynamics of the US sports betting space - and it's a shift that will only serve to strengthen the prediction market landscape in the nation.

Observing these developments from afar is something that certainly sounds counter-intuitive to Polymarket, who gained regulatory clearance to re-enter the US market months ago - but continues to remain inactive. Marking its re-entry via the joining of the Coalition of Prediction Markets would have been a powerful statement of intent from the operator - which begs the question; is Polymarket distancing itself from the pack, or has Kalshi left its main competitor out in the cold?

Political questions such as these require diplomatic answers and, when queried on the absence of Polymarket, Kalshi's representative stated: "We can't comment on future member participation."

Indeed, it would appear our Kalshi spokesperson is not the oracle on coalition expansion. Nevertheless, the company has affirmatively answered that it both hopes and expects the organization to grow in number of member operators. The question of when - and who; well, someone really should make a market on that!