Singapore and Thailand recently moved to ban Polymarket from their respective jurisdictions, arguing that the site was just another gambling platform.
On the surface, that argument seems logical. Polymarket’s inclusion of sports prediction markets makes it seem like a competitor to licensed sportsbooks around the world.
After all, even prediction market’s harshest critics acknowledge that there’s some kind of value in an investment mechanism to hedge against events like an election, but the outcome of a sporting match just doesn’t have the same material impact as an election or war.
But, beneath the surface, the argument that prediction markets are simply a Web3 version of gambling falls short, argues New York-based crypto attorney Aaron Brogan.
“If you are a state-licensed gambling product, then you are taking one side of the bet. You’re essentially betting against your users,” Brogan said. “You’re booking the bets…and offering certain odds to users. Whether you make money or not depends on the odds you set.”
Prediction markets like Polymarket and Kalshi, in contrast, act as neutral intermediaries that match trades without taking a side, making money via transaction fees.
“You are not taking a side of the bet as the market in that case, which fundamentally changes the incentives involved and makes the product different in a holistic way,” Brogan said, pointing out that prediction market platforms don’t ban their best users in the same way casinos boot out card counting pros as it kills the house’s mathematical edge.
“Prediction markets aren’t gambling because they’re not structured to be,” Brogan said. “They’re tools for understanding, hedging, and creating public goods. That’s what makes them fundamentally different.”
Getting an online gambling license in the U.S. was a herculean effort, and one might wonder why the new players in the space, like Draft Kings or incumbents like MGM, which followed in opening up online sports betting operations, don’t go after prediction markets at the state level where gambling is regulated.
The key legal distinction, says Brogan, lies in the regulatory framework. In the U.S., prediction markets that are regist
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Author: Sam Reynolds
