Prediction markets, like Polymarket, are emerging platforms allowing speculation on future events, often presented as investment tools. However, they share significant behavioral similarities with traditional gambling, posing unique clinical challenges for individuals vulnerable to gambling disorder.
These platforms foster illusions of control, encourage continuous engagement, and can lead to chasing losses, mirroring problematic gambling patterns. A key concern is the lack of responsible gambling safeguards, such as self-exclusion, common in regulated gambling. Additionally, current gambling assessment tools rarely cover prediction markets, potentially leading to underreporting.
Clinicians must routinely assess for prediction market participation, recognize its role in potential relapses, and integrate it into treatment plans. Focusing on the behavior’s function rather than its legal definition is crucial for effective intervention.
Prediction markets have gained significant attention in recent years, particularly with the growth of platforms such as Polymarket. These platforms allow individuals to buy and sell contracts based on the outcome of future events, including politics, economics, entertainment, and increasingly, sporting events. Although prediction markets are often presented as financial instruments rather than gambling products, they share many characteristics with traditional forms of wagering. For individuals vulnerable to gambling disorder, these platforms may present unique clinical challenges. This article reviews the development of Polymarket, explores its potential impact on individuals with gambling addiction, examines concerns regarding regulation and self-exclusion, and provides recommendations for assessment and treatment.
Introduction
Mental health professionals who treat gambling disorder are accustomed to assessing sports betting, casino gambling, lottery play, online gambling, and more recently, cryptocurrency-related gambling behaviors. A newer area requiring clinical attention is the emergence of prediction markets.
Prediction markets allow individuals to speculate on future events by purchasing contracts that increase or decrease in value depending on the likelihood of a particular outcome. While advocates often describe these platforms as tools for forecasting or investing, many of the psychological mechanisms that drive participation closely resemble those seen in gambling.
As prediction markets continue to expand, clinicians should become familiar with how these platforms operate and the potential risks they may pose to individuals with gambling-related vulnerabilities.
A Brief History of Polymarket
Polymarket was founded in 2020 as a blockchain-based prediction market platform that enables users to trade contracts tied to real-world events. Participants can purchase positions on questions such as election outcomes, economic indicators, entertainment awards, and sporting events. The value of a contract fluctuates based on market demand and participants’ collective expectations regarding the likelihood of an event occurring.
Unlike traditional sportsbooks, Polymarket presents participation as trading rather than betting. Users often describe themselves as investors, traders, or forecasters rather than gamblers. This distinction may appear meaningful from a legal or regulatory perspective, but it is often less meaningful from a clinical standpoint.
In 2022, the Commodity Futures Trading Commission (CFTC) reached a settlement with Polymarket regarding unregistered event-based contracts offered to United States residents. Since that time, the legal status of prediction markets has continued to evolve. More recently, federal regulators have explored frameworks that may allow broader access to event contracts, including sports-related contracts, while several state gaming regulators have expressed concerns about the overlap between prediction markets and sports wagering.
For clinicians, the evolving regulatory environment is important because clients may increasingly view these platforms as legal alternatives to traditional sports betting, regardless of whether the behavioral risks are substantially different.
Prediction Markets and Gambling Disorder
From a clinical perspective, the most important question is not whether prediction markets are legally categorized as trading or gambling. Rather, the question is whether participation produces the same behavioral patterns associated with gambling disorder.
The diagnostic features of gambling disorder include preoccupation with gambling, increasing amounts of money wagered, unsuccessful attempts to stop, chasing losses, deception regarding gambling activity, and continued participation despite significant negative consequences (American Psychiatric Association, 2022).
Prediction markets can reinforce many of these same behaviors.
First, they create the perception that success is primarily determined by knowledge and skill. Individuals may believe that careful research, statistical analysis, political expertise, or sports knowledge provides a significant advantage. While knowledge may influence decision-making, the belief that outcomes can be consistently predicted may contribute to cognitive distortions commonly observed in gambling disorder, including illusions of control and overconfidence.
Second, prediction markets offer nearly continuous opportunities for participation. As one market closes, another becomes available. This constant availability may encourage compulsive monitoring, repeated checking of positions, and difficulty disengaging from the platform.
Third, losses can trigger the same chasing behavior commonly seen in sports betting and casino gambling. Individuals may increase position sizes, enter additional markets, or seek higher-risk opportunities in an effort to recover prior losses.
Clinically, it is not uncommon to hear clients state, “I’m not gambling. I’m trading.” This belief can become a significant barrier to treatment because it reduces insight into the problematic nature of the behavior.
Regulatory and Self-Exclusion Concerns
One of the most significant concerns for clinicians is the relative lack of responsible gambling safeguards commonly found in traditional gambling environments.
Most regulated sportsbooks and online gambling operators provide tools such as self-exclusion programs, deposit limits, cooling-off periods, and voluntary account restrictions. These interventions can play an important role in relapse prevention and recovery.
Prediction markets currently operate under a different regulatory framework. As a result, protections available through state-regulated gambling systems may not automatically apply to prediction market platforms.
This issue has drawn attention from the National Council on Problem Gambling (NCPG). The organization has publicly expressed concern that prediction markets may expose individuals to gambling-related harms while operating outside many of the responsible gambling requirements imposed on traditional gambling operators. The NCPG has specifically noted concerns regarding consumer protections, access to self-exclusion programs, and the availability of problem gambling resources.
For individuals in recovery, this presents a potentially significant treatment challenge. A person who has successfully self-excluded from casinos, sportsbooks, or online gambling sites may still be able to access prediction markets. Consequently, clinicians should avoid assuming that self-exclusion from traditional gambling platforms eliminates access to gambling-like activities.
Assessment Challenges and Emerging Screening Considerations
An emerging challenge for clinicians is that many commonly used gambling screening instruments were developed before the widespread availability of prediction markets. Instruments such as the South Oaks Gambling Screen (SOGS), the Problem Gambling Severity Index (PGSI), and various agency-specific gambling assessments typically inquire about traditional forms of gambling such as casino gambling, sports betting, lottery participation, card games, and online gambling. However, few specifically assess participation in prediction markets.
As prediction markets continue to gain popularity, clinicians should consider supplementing existing assessments with direct questions regarding platforms such as Polymarket, Kalshi, PredictIt, and other event contract trading platforms. Failure to do so may result in underreporting of gambling-related behaviors, particularly among clients who do not view prediction market participation as gambling.
Future revisions of gambling assessment instruments may benefit from incorporating specific questions regarding prediction market activity. For example, clinicians may ask whether a client has traded contracts based on sporting events, political elections, economic outcomes, or other future events for financial gain.
Until standardized assessment measures are updated, clinicians should routinely inquire about prediction market participation during intake evaluations, ongoing treatment, and relapse prevention planning.
Clinical Case Example
The following case is a composite illustration based on common themes observed in gambling treatment settings and does not represent any actual individual.
“Michael,” a 24-year-old college graduate, presented for treatment after relapsing following approximately 14 months of recovery from sports betting. During his initial recovery period, he had voluntarily self-excluded from several online sportsbooks, attended Gamblers Anonymous meetings, and worked with a therapist specializing in gambling disorder.
At intake, Michael reported that he had remained abstinent from traditional sports betting. However, further assessment revealed that he had become increasingly involved with a prediction market platform. Initially, he viewed the activity as fundamentally different from gambling. He described it as “trading” and believed that his knowledge of sports statistics provided him with a significant advantage over other participants.
Over time, Michael began spending several hours each day monitoring sporting event contracts, researching teams, tracking injuries, and adjusting positions based on market movement. He reported experiencing excitement before events, anxiety during events, and frustration following losses. When contracts resulted in losses, he frequently increased the size of subsequent positions in an effort to recover money quickly.
Despite recognizing similarities between his previous sports betting behavior and his current prediction market activity, Michael initially struggled to identify the behavior as part of his gambling disorder. He repeatedly emphasized that he was participating in a financial marketplace rather than placing wagers.
A significant clinical issue emerged when Michael disclosed that his prior self-exclusion agreements did not prevent him from accessing prediction market platforms. Although he had successfully blocked himself from traditional sportsbooks, he was still able to participate in event-based contracts that closely mirrored his previous gambling behavior.
Treatment focused on helping Michael recognize the functional similarities between sports betting and prediction market participation. Cognitive behavioral interventions addressed cognitive distortions related to perceived skill and control, while relapse prevention strategies were updated to include prediction markets as a high-risk activity. As treatment progressed, Michael reported greater insight into the role prediction markets played in maintaining his gambling urges and acknowledged that the distinction between trading and gambling had become a barrier to his recovery.
This case highlights a growing challenge facing clinicians. Individuals recovering from gambling disorder may encounter prediction markets as an alternative outlet that appears different on the surface but activates many of the same psychological and behavioral processes associated with traditional gambling.
Treatment Considerations
The treatment of problematic prediction market participation is likely to mirror many evidence-based approaches used for gambling disorder.
Psychoeducation is often an important first step. Clients frequently view prediction market activity differently from gambling and may benefit from understanding how uncertainty, reward anticipation, variable reinforcement schedules, and near-miss experiences activate many of the same psychological processes observed in traditional gambling.
Cognitive Behavioral Therapy remains one of the most effective treatments for gambling disorder. CBT interventions may focus on identifying cognitive distortions, challenging beliefs regarding predictability and control, managing urges, and developing healthier coping strategies.
Motivational Interviewing may be particularly helpful when clients remain ambivalent about whether their participation is problematic. Many individuals genuinely perceive themselves as investors rather than gamblers, making motivational approaches useful for exploring discrepancies between intended goals and actual consequences.
Additional treatment strategies may include financial accountability arrangements, limiting access to trading platforms, reducing access to cryptocurrency wallets and payment methods, increasing family involvement when appropriate, developing structured alternatives during high-risk periods, participation in Gamblers Anonymous, and relapse prevention planning that specifically addresses prediction markets.
Conclusion
Prediction markets represent a rapidly emerging area of concern for professionals who treat gambling disorder. While platforms such as Polymarket are often framed as investment or forecasting tools, they contain many of the same psychological and behavioral features associated with traditional gambling.
Prediction markets may also represent a situation that is familiar to many gambling treatment professionals. When daily fantasy sports first gained widespread popularity, many participants viewed it as a game of skill rather than gambling. Clients frequently described themselves as competitors, researchers, or investors in player performance rather than gamblers. Over time, clinicians, researchers, and regulators began to recognize that a subset of participants experienced many of the same harms associated with traditional gambling, including chasing losses, impaired control, financial consequences, and significant emotional distress.
Prediction markets may follow a similar trajectory. While there are legitimate distinctions between traditional gambling and event contract trading, the psychological experience for some participants may be remarkably similar. Individuals who are vulnerable to gambling disorder may become less focused on whether an activity is legally classified as gambling and more focused on the excitement, uncertainty, financial risk, and potential reward associated with the activity. As a result, clinicians should remain cautious about relying solely on legal or regulatory definitions when assessing risk and should instead focus on the function the behavior serves in the individual’s life.
The distinction between gambling and trading may be meaningful from a regulatory perspective, but it is often less meaningful from a clinical one. Individuals vulnerable to gambling disorder may experience the same patterns of preoccupation, chasing losses, impaired control, secrecy, and financial harm regardless of how the activity is labeled.
As prediction markets become more accessible and continue to expand into sports-related contracts, clinicians should include these platforms in routine gambling assessments, understand their potential role in relapse, and incorporate them into treatment planning and recovery discussions.
Richard Anemone, LMHC, is a Licensed Mental Health Counselor with over 20 years of clinical experience and a specialty in the assessment and treatment of gambling disorder and behavioral addictions. If you or someone you know is struggling with gambling-related concerns, including sports betting, online gambling, or prediction market participation, professional help is available. For additional information or to schedule a consultation, visit www.bmhc-ny.com.
References
American Psychiatric Association. (2022). Diagnostic and statistical manual of mental disorders (5th ed., text rev.). American Psychiatric Association Publishing.
Commodity Futures Trading Commission. (2022, January 3). CFTC orders event-based binary options markets operator to pay $1.4 million penalty.
Ferris, J., & Wynne, H. (2001). The Canadian Problem Gambling Index: Final report. Canadian Centre on Substance Abuse.
Lesieur, H. R., & Blume, S. B. (1987). The South Oaks Gambling Screen (SOGS): A new instrument for the identification of pathological gamblers. American Journal of Psychiatry, 144(9), 1184–1188.
National Council on Problem Gambling. (2025, March 10). National Council on Problem Gambling comments on the CFTC prediction markets roundtable.
National Council on Problem Gambling. (2026, February 9). Resolution of the NCPG Board of Directors calling on prediction market operators to promote the National Problem Gambling Helpline™.
National Council on Problem Gambling. (2026, April 24). National Council on Problem Gambling’s public comment on Commodity Futures Trading Commission’s advance notice of proposed rulemaking regarding event contract derivatives.
Petry, N. M., Ginley, M. K., & Rash, C. J. (2017). A systematic review of treatments for problem gambling. Psychology of Addictive Behaviors, 31(8), 951–961.
Pfund, R. A., Peter, S. C., McAfee, N. W., Ginley, M. K., Whelan, J. P., & Meyers, A. W. (2023). Cognitive-behavioral treatment for gambling harm: Umbrella review and meta-analysis. Clinical Psychology Review, 105, Article 102345.
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