Prediction Markets Under Fire: Fanatics Executive Compares Kalshi, Polymarket to Offshores

The discussion surrounding the safety and regulation of digital wagering has reached a new level of intensity. During the recent National Conference of State Legislatures Legislative Summit in Chicago, Anthony D’Angelo, head of responsible gaming at Fanatics Betting and Gaming, delivered a sharp critique of the industry. He drew a direct line between so-called prediction markets and traditional black market operators. In his view, the boundaries between illegal offshore sportsbooks and platforms offering wagers on political or social events are increasingly blurring.

Platforms like Polymarket and Kalshi are particularly under scrutiny. D’Angelo argues that these platforms do not possess the rigorous control mechanisms that are standard for licensed operators. In states where sports betting has not yet been legalized, the migration of users to such markets presents a significant risk. The industry is now debating whether stricter responsible gambling measures for legal operators are inadvertently driving customers toward these unregulated players.

Numbers and facts

A key aspect of the panel in Chicago was the statistical findings presented by David Sasaki, director at the American Institute for Boys and Men. His data illustrates the scale of digital betting penetration. Approximately one in four Americans has or has had an account with an online sportsbook. However, the figures for the core target group are even more striking: among men aged 18 to 49, this value is nearly 50 percent. Such extreme market penetration makes protective measures all the more urgent.

The financial impact of this trend was recently felt by the giant BetMGM. CEO Adam Greenblatt reported a 15 percent year-on-year decrease in adjusted EBITDA. He attributed this partly to the regulatory complexity in the prediction market sector. This demonstrates that competition from unregulated or partially regulated niche products now has tangible effects on the balance sheets of major licensed players.

Background

At its core, the question is where sports betting ends and financial or speculative markets begin. Fanatics itself offers prediction market products but ensures they are not offered in states where sports betting is already legal or subjects them to stricter controls, according to D’Angelo. The industry has effectively split into two camps. On one side stands the Sports Betting Alliance (SBA) with heavyweights like DraftKings, FanDuel, Fanatics, and BetMGM. On the other side is the Coalition for Prediction Markets (CPM), which includes Kalshi, Crypto.com, Robinhood, and Underdog.

"The prediction markets products that don’t have the controls that Fanatics, FanDuel and DraftKings have are illegal sports betting markets." - Anthony D’Angelo, Head of Responsible Gaming at Fanatics Betting and Gaming

Expert David Sasaki called for courageous steps from legislators during the summit. He suggested limiting betting frequency, banning micro-betting, and implementing stricter advertising restrictions. A concrete example from Europe was cited favorably: Flutter enforces a 500 pound monthly deposit limit for all customers under 25 in the UK and Ireland. In the US, initial steps are being taken in Colorado, where a bill was passed that could limit players to six bets per day.

Why it matters for German players

This debate is highly relevant for German players because Germany has already implemented one of the strictest regulatory frameworks worldwide with the State Treaty on Gambling 2021 (GlüStV 2021). While limits are still being discussed in the US, a monthly deposit limit of 1,000 euros across all providers and a stake limit of 1 euro per spin on virtual slots are already law here. The central monitoring database LUGAS ensures these limits are maintained.

German gamblers should strictly avoid platforms without a GGL license (Joint Gambling Authority of the Federal States). Prediction markets, which often operate on a crypto basis like Polymarket, do not hold a permit for sports betting or casino games in Germany. Anyone playing there enjoys no protection under German law and risks not having winnings paid out or falling into a debt trap. Only those on the official GGL whitelist guarantee a fair gaming environment.

What it means for GGL-licensed casinos

Licensed operators in Germany must closely monitor this international trend. The criticism from Fanatics shows that licensed providers worldwide are under pressure to continuously improve their responsible gambling systems to distinguish themselves from the lucrative but dangerous black market. For German providers, this means that technical solutions for addiction prevention and early detection of problematic gambling behavior are becoming competitive advantages.

Advertising bans requested by Sasaki, such as the "whistle-to-whistle" ban—prohibiting ads during a sports broadcast—are already partially reality in Germany or subject to heated debate. GGL-licensed casinos must prove that strict player protection is the more sustainable business model in the long term, even if revenues might temporarily be lost to unregulated markets. Collaboration between authorities, science, and operators remains the only way to successfully channel players into legal avenues.