Prediction Markets Are Eyeing US Stocks—And Regulators Are Watching

Belgium Remembers 1944-1945, Tweede Wereldoorlog België, 75 Jaar Bevrijding Expert · 2026-09-28

Imagine being able to bet on whether Apple's stock will hit $200 by next month. That's the world prediction markets like Kalshi and Polymarket are pushing for. They've already made waves by letting people wager on elections, sports, and economic data. Now they want a piece of the US stock market. And that's making regulators very nervous. ### The Big Bet on Stocks Prediction markets are platforms where you trade contracts on the outcome of future events. The price of a contract reflects the market's collective belief about the probability of that event. For example, a contract that pays $1 if the S&P 500 closes above 5,000 next month might trade at $0.65, implying a 65% chance. These platforms have grown popular because they're often more accurate than polls or pundits. But they've largely been limited to non-financial events. Now, some are trying to offer contracts tied to stock prices. That's a whole different ballgame. ### Why Regulators Are Alarmed The US stock market is heavily regulated by the SEC and CFTC. They have strict rules about what can be traded and who can trade it. Prediction markets that offer stock-based contracts could blur the lines between gambling and investing. "The concern is that these products could be used to manipulate stock prices or evade securities laws," says a former SEC official. "And if they're not properly regulated, they could pose risks to the broader financial system." There's also the issue of insider trading. If someone with inside knowledge of a company could bet on its stock price on a prediction market, that's a problem. Traditional stock exchanges have surveillance systems to catch that. Prediction markets? Not so much. ### What's at Stake? The push into stocks is a big opportunity for prediction markets. The US stock market is worth over $50 trillion. Even a small slice of that would be huge for these platforms. But it's also a big risk. If regulators crack down, it could set the industry back years. Some platforms are already feeling the heat. Kalshi, for instance, had to delay its plans to offer contracts on which party would control Congress after the CFTC raised concerns. That was a political event, not a stock. So you can imagine the scrutiny for stock-based contracts. ### The Road Ahead So what happens next? It depends on how regulators and prediction markets navigate this. The CFTC has said it's open to innovation but wants to ensure markets are fair and transparent. Prediction markets argue they can provide valuable hedging tools and price discovery. One thing's for sure: the battle over prediction markets and US stocks is just beginning. And it could reshape how we think about investing and forecasting. What do you think? Should prediction markets be allowed to offer stock-based contracts? Let us know in the comments.