Prediction Markets Overriding Sports Betting Bans Ahead of Super Bowl 2026

With Super Bowl LX only days away, and California set to host, bets are being placed on the game in all states, even those without legal sports betting.

Companies like Kalshi and Polymarket have been expanding into all states by allowing users to buy and sell contracts for sporting events, which some argue is little different from sports betting.  

That expansion was particularly evident in California, which has a 100-year-old statute prohibiting sports betting. The use of prediction market apps highlights unresolved legal questions around what legally constitutes a bet. 

Kalshi reported that trading volume on its Seattle vs. New England Super Bowl market exceeded $161 million by Tuesday evening, with nearly 70% of traders backing Seattle. The figure represents more than six times the volume recorded on the company's Super Bowl winner market last year.

Kalshi and Polymarket operate exchanges that facilitate trading in binary contracts that pay out $1 if an outcome occurs. Users can enter and exit positions before settlement, unlike conventional sportsbook wagers that lock in bets. 

The companies charge transaction fees but don't act as the counterparty to trades. This structure, they say, differentiates their platforms from sportsbooks that profit directly from losing bets through built-in commissions.

From a user perspective, however, outcomes often mirror sportsbook pricing. A $100 position on New England via Kalshi would return $289 if successful, while a comparable wager at FanDuel would net roughly $190. 

NFL draws a hard line

As prediction markets gain scale and capital, professional sports leagues draw sharper distinctions. The prediction market segment has attracted billions of dollars in funding, with various competitors developed by well-known gaming and financial entities.

However, advertising for prediction markets will not be seen in this year's Super Bowl as the NFL continues to maintain a strong stance against the sector.

Prediction markets were added to the NFL's prohibited advertising categories before the 2025 season. The list, which is not public, also includes tobacco, firearms, and pornography. The ban applies across the regular season and postseason.

The NFL raised integrity concerns and argued that sports event contracts do not have adequate protections against concerns present in sports betting regulations, such as limits on easily manipulated markets and requirements around official league data. The NHL and MLS leagues permit prediction market partnerships.

Several companies that operate prediction markets have the resources to purchase Super Bowl ads. Polymarket secured a commitment of up to $2 billion from the operator of the New York Stock Exchange, while Kalshi announced $1 billion in new funding in December. Those firms could promote other products during the game, but not prediction markets.

Sports betting ads, while permitted, are capped. GamblingHarm.org reports that no more than six sportsbook ads are allowed during this year's Super Bowl.