PANews reported on February 8th, citing Business Insider, that analysis indicates the boom in US prediction markets is built on a precarious foundation, primarily benefiting from regulatory arbitrage opportunities. For example, currently, most US states lack comprehensive regulations to govern sports betting through prediction markets. Data shows that in 2025, sports-related transactions accounted for approximately 85% of Kalshi's trading volume, while Polymarket accounted for approximately 39%. Prediction markets position themselves as futures contract trading regulated by the Commodity Futures Trading Commission (CFTC), thereby offering sports betting in states that prohibit sports betting, such as California and Texas. Macquarie analyst Chad Beynon stated that prediction markets are largely a way to circumvent state sports betting rules; if sports betting were legalized at the federal level in the US, prediction markets might not even exist. Furthermore, institutional investment faces obstacles.

Devin Ryan, head of financial technology research at Citizens Bank, believes the market needs to establish robust integrity rules and that trading volume in non-sports markets needs to increase. He points out that the current market size on Kalshi predicting January CPI inflation data is less than $1 million, and the core inflation market size is less than $30,000, insufficient liquidity to attract institutional participation. Professor Timothy Fong, co-director of the UCLA Gaming Research Program, expressed concern about the viability of turning current events into tradable contracts for profit and whether this model could lead to a dystopian society.