Betting makes it to the White House
This week, The Washington Post reported on the gambling industry’s journey into the American mainstream reaching perhaps its most symbolic milestone yet: the White House.
This article examines how Donald Trump’s decision to stage a UFC event on the South Lawn has effectively turned one of the world’s most recognisable political venues into a showcase for sports betting and prediction markets.
Branding for Polymarket, where users traded millions of dollars on the outcome of the fights, sat alongside sponsorship from online casino and sportsbook Stake, while sportsbooks themselves offered novelty wagers on everything from whether Trump will receive a birthday cake to whether the president might fall asleep cageside.
The article argues the event encapsulated the extraordinary transformation of gambling in the United States over the past decade.
Before the Supreme Court overturned the federal sports betting ban in 2018, legal wagering was largely confined to Nevada. Today, sports betting is legal in 39 states, with Americans having staked more than $650bn since the ruling.
At the same time, prediction markets have exploded in popularity, allowing users to speculate not only on sporting events but also politics, economics and countless other real-world outcomes.
Trump’s own relationship with the sector forms a central part of the story. A former casino owner himself, the president has disclosed a personal investment in DraftKings, while Truth Social is working with Crypto.com to launch its own prediction market. His son, Donald Trump Jr., has also invested in Polymarket and advised both Polymarket and Kalshi.
Critics quoted by the Post argue those connections create at least the appearance of conflicts of interest, particularly when gambling companies receive such prominent exposure during an event hosted at the White House itself.
With the Trump administration proposing regulations that would largely permit prediction markets while restricting only certain sensitive categories, critics fear meaningful restrictions are unlikely any time soon.
For the gambling industry, however, a UFC cage on the White House lawn may prove to be the ultimate symbol of just how far betting has travelled from the shadows.
The rise of financial ‘degens’
Elsewhere, Bloomberg explored how for many younger Americans, gambling is no longer confined to sportsbooks or casinos – it’s become embedded in the way they invest.
This piece explores the growing culture of “degens”, a generation of retail traders embracing meme stocks, options, cryptocurrencies and prediction markets in pursuit of returns they believe traditional investing can no longer deliver.
The article argues this isn’t simply a product of social media hype, but a response to an economic landscape in which home ownership feels increasingly unattainable, inequality continues to widen and artificial intelligence threatens future career prospects.
The feature follows several young traders whose experiences reflect that mindset. One describes teaching himself complex options trading strategies because steady long-term investing simply wouldn’t generate the wealth he believes he needs.
Another recounts the addictive thrill of early trading successes before years of losses chasing similarly spectacular returns. Throughout the piece, speculation is presented less as entertainment than as a perceived necessity for a generation convinced conventional financial advice no longer applies to them.
Bloomberg notes that surveys appear to support this outlook. Large numbers of younger investors say they feel compelled to take substantial financial risks in order to achieve their long-term goals, with many trading options, buying meme stocks or even investing borrowed money.
Academics interviewed in the article suggest this behaviour aligns closely with behavioural economics, where people who feel they’re falling behind become increasingly attracted to long-shot bets with potentially life-changing payoffs.
Housing affordability features heavily in the analysis. Researchers cited by Bloomberg argue that people who come close to buying a home before ultimately being priced out often become more willing to take financial risks, effectively gambling in an attempt to regain a path towards the “American Dream”.
Others argue social media has simply normalised speculative behaviour by constantly showcasing extraordinary success stories while making trading feel accessible, entertaining and aspirational.
Not everyone is convinced the economic explanation tells the whole story. Experts also point to the influence of online culture, instant gratification and the appeal of luxury lifestyles promoted across TikTok and other platforms.
Meanwhile, decades of academic research continue to suggest that frequent retail traders overwhelmingly underperform the market over time, with fewer than 1% consistently generating profits.
Nevertheless, the piece concludes that as affordability pressures mount and uncertainty over the future grows, speculative trading is increasingly being viewed not as reckless gambling but as one of the few remaining opportunities to get ahead.
Prediction markets meet the compliance department
Finally, prediction markets may still be battling regulators, but the Financial Times reports that another group is already scrambling to respond: corporate compliance departments.
As platforms such as Kalshi and Polymarket expand beyond politics and sport into corporate events, businesses are increasingly finding themselves having to decide whether existing insider trading rules are sufficient, or whether entirely new policies are required.
Employees often possess confidential information that could influence the outcome of prediction market contracts long before it becomes public.
Unlike traditional insider trading, however, those contracts can focus on surprisingly niche corporate events, ranging from product launches and private company valuations to how many times a chief executive mentions artificial intelligence during an earnings call.
Lawyers quoted by the FT warn that information employees may not traditionally view as market-sensitive could nevertheless provide a significant advantage in these increasingly sophisticated markets.
The urgency has been heightened by several high-profile legal cases. US prosecutors have accused a Google software engineer of using confidential internal search data to place profitable prediction market wagers worth more than $1.2m, while another case centres on alleged betting linked to a planned military operation in Venezuela.
Although the allegations remain before the courts, they have prompted companies to examine whether existing compliance frameworks adequately address the risks posed by prediction markets.
Some organisations have introduced blanket bans preventing employees from holding prediction market accounts altogether, arguing the reputational risks outweigh any potential benefits.
Others have updated insider trading policies to explicitly prohibit using material non-public information when placing prediction market trades, while some continue to rely on existing compliance rules that already prohibit misuse of confidential information regardless of the market involved.
The platforms themselves are also tightening controls. Kalshi has introduced additional disclosure requirements for users betting on markets that may involve access to confidential information, following previous enforcement action against a user accused of wagering with inside knowledge.
Ultimately, the FT suggests companies are trying to write policies for a market evolving faster than regulators can respond.
As prediction markets continue expanding into new areas of business and finance, compliance teams are increasingly finding themselves confronting a question that barely existed a few years ago: where exactly does informed speculation end and insider trading begin?
