The Contract Is Open to Eighteen-Year-Olds. The Casino Is Not.

On the last Friday of August, two documents arrived within hours of each other. The first was a CNN analysis estimating that Americans aged 18 to 21 had traded $5.4 billion on Kalshi so far this year, about $3.9 billion of it in sports contracts and parlays. The second was a ruling from the Ninth Circuit declaring that “the substance of the sports event contracts offered on Kalshi’s DCM is sports gambling.” One described who is playing. The other asked what, legally, they are playing.

The two questions are the same question. A prediction market sells a contract that pays out if something happens: a team wins, a bill passes, a number prints above a threshold. If the thing is a financial instrument, the federal government regulates it and an eighteen-year-old may hold it. If the thing is a wager, fifty state gambling regimes apply, and in most of them the line is twenty-one. The industry that built these exchanges was assembled by people not much older than its youngest customers, and its future is being decided by a dispute over a definition.

The builders

Shayne Coplan was 27 when Intercontinental Exchange, owner of the New York Stock Exchange, made a $2 billion strategic investment in Polymarket at a $9 billion valuation, which Bloomberg’s index translated into the title of youngest self-made billionaire. Fortune reported that he left New York University without finishing, that he reportedly started the company in the bathroom of his Lower East Side apartment, and that at the start of the pandemic, aged 21, he wrote on X: “2.5 years since I dropped out and nothing to show for it.”

Kalshi’s founders are the other half of the story. Tarek Mansour and Luana Lopes Lara are both 29, according to Forbes, which in May estimated the company at $22 billion after a $1 billion round led by Coatue, up from $11 billion in December and $2 billion the previous June. Forbes puts each founder’s stake at roughly 12 percent and each fortune at about $2.6 billion. Kalshi’s own figures, as reported there, are 2 million monthly active traders and annualized volume of $178 billion.

The founders share a posture more than a biography: both companies were built to move a fringe activity into a regulated container. Polymarket had been blocked for American users in 2022; in November 2025 the Commodity Futures Trading Commission granted it an amended order of designation, allowing intermediated access through brokerages and placing it under a framework with “enhanced surveillance, market-supervision standards, clearing procedures, and Part 16 reporting obligations,” in the article’s paraphrase. Coplan said in the company’s press release: “People rely on Polymarket because we provide clarity where there is confusion.” The confusion was about to arrive from another direction.

The customers

Sports are the product. CNN’s analysis found that sports and parlays make up about 80 percent of Kalshi’s volume, which has topped $173 billion this year. The state attorneys general who filed a brief in Massachusetts put sports at roughly 90 percent of volume in some months of 2025. Prediction markets began in election and economics curiosity; they have become, by volume, a league-night business.

The young are a minority of the volume and a majority of the argument. Kalshi told CNN that 18-to-21-year-olds are 3.14 percent of its trading volume, and declined to give exact spending figures for the group, so the $5.4 billion is CNN’s estimate, not a company number. The two figures are consistent: 3.14 percent of $173 billion is about $5.4 billion. The scale of the question is clear either way. Jonathan Michaels, who runs a gaming-industry consulting firm, told CNN: “Normally you’d have a big summer lull, but the World Cup changed that completely.”

The age rule is where the contradiction sits. Because prediction sites are regulated as federal financial markets, they are open to anyone 18 and over, while most state-regulated casinos and sportsbooks are 21 and over. Fanatics, which launched its own prediction platform last year, set it at 21; a spokesman said the company believes “21+ is the right age for any type of real-money activities.” Novig, which won CFTC approval in June, launched in August with a 21-plus policy. The CFTC, CNN reported, rebuffed calls from the NCAA, the NFL, the NBA and the PGA Tour to raise the minimum to 21, and is finalizing rules that keep 18. The American Gaming Association’s president, Bill Miller, called the arrangement “a backdoor into sports-betting.”

A disclosure belongs here, and CNN supplied it: the network has a partnership with Kalshi and uses its data to cover major events.

The campus

The NCAA has been the loudest institutional objector, and its objection is not mainly about the bettors. In December, Kalshi was reported to be preparing markets on whether individual college athletes would enter the transfer portal, settled by “public announcements” from a player or his team. The NCAA’s president, Charlie Baker, said that “the NCAA vehemently opposes college sports prediction markets,” and that athletes’ “decisions and future should not be gambled with.” Kalshi told its federal regulator that it had no immediate plans to offer portal trading, though it said it would begin self-certifying markets.

The worry is that a twenty-year-old linebacker deciding where to play next is, in the markets’ vocabulary, an outcome. Nothing in the reporting reviewed here shows harm from that; the NCAA’s objection is structural, and the NFL, the NBA and the PGA Tour joined it in asking the CFTC for a minimum age of 21.

The courts

The legal map has no consistent shape. In April, the Third Circuit ruled 2-1 that New Jersey could not enforce its gambling law against Kalshi’s sports contracts, with Judge David Porter writing: “This state regulation is exactly the patchwork that Congress replaced wholecloth by creating the CFTC.” Judge Jane Roth dissented, calling Kalshi’s position a “performative sleight meant to obscure the reality that Kalshi’s products are sports gambling.” Days earlier, a Nevada judge had extended a ban on Kalshi’s contracts there.

Then the other courts spoke. The Ninth Circuit, on August 28, sided with Nevada. On September 25, the Sixth Circuit held unanimously that Ohio and Tennessee can regulate event contracts under their gambling laws. Al Jazeera noted that the circuits now disagree, which is the usual precondition for the Supreme Court. Kalshi said after the Ninth Circuit ruling that it would seek further review. A TD Cowen analyst quoted by The Block in April thought the states held the stronger legal position and that a final answer might not come until 2028.

Meanwhile the federal government has taken the industry’s side with unusual force. The CFTC sued New York in April, hours after New York’s attorney general joined an amicus brief signed by 37 other attorneys general backing Massachusetts. Its chairman, Michael Selig, said that “New York is the latest state to ignore federal law and decades of precedent.” The attorney general, Letitia James, called Kalshi’s sports contracts “illegal gambling by another name.” In September, New York sued Polymarket directly, alleging an unlicensed gambling operation that avoids the taxes paid by licensed platforms and exposes New Yorkers under 21 to risk. Polymarket’s chief legal officer, Neal Kumar, called the suit “disappointing,” said the company has more than 350 employees in New York, and said it would stay and fight for its users.

The case for the markets

Skeptics of the regulators have arguments worth stating at full strength, and they are not all self-interested.

The oldest is epistemic. Prediction markets are supposed to be better forecasters than polls, and there is evidence. A study of 964 polls across the 1988 through 2004 presidential elections found that the Iowa Electronic Markets were closer to the eventual outcome 74 percent of the time, and “significantly” better in every election when forecasting more than 100 days out. If that holds, a market that pays people to be right is a public good that happens to look like a bet, and a state that licenses casinos has no obvious claim to it.

The second is about where the activity goes. A regulated exchange, supervised under the federal framework described above, with surveillance and reporting duties, is arguably a safer place for a 19-year-old’s money than an unregulated book that answers to nobody; Polymarket itself was shut off to American users in 2022 before its return. Banning the regulated version does not abolish the demand. It relocates it.

Both arguments are real, and both have limits that the record shows. The Iowa study is about vote shares in presidential elections; it says nothing about whether a parlay on a Tuesday football game improves anyone’s forecast of anything, and sports are, by the CNN figures, most of what is traded. And the safety argument assumes the exchange is the lesser danger. The states, and much of the sports establishment, say the exchange is the sportsbook itself, under a different compliance department.

The age line

The standard path was supposed to be the thing young people were leaving. College, a first job, a slow accumulation of savings, a license to do adult things at the appropriate age. What the prediction-market fight shows is that the age line itself has become the contested territory. For the youngest customers, the product is identical whichever court is right. Only its name changes. A person aged twenty can hold a contract on a game that the same person could not legally wager on in a casino in most states, and the founders who built the venue are 29.

The young were supposed to be leaving the slow, credentialed path for something faster. What the courts are now deciding is whether the faster thing counts as a market, which the young may enter at eighteen, or as a casino, which must wait until they are twenty-one. Three years is the whole dispute, and the football season will not wait for it.

Not financial advice.