The National Council on Problem Gambling (NCPG) is committed to working with prediction markets, despite frustration from existing members.
The NCPG is a nonprofit organization that was formed in 1972 to help nullify risks and harm associated with gambling. Although prediction markets maintain that their event contracts do not constitute gambling, Kalshi controversially became the first trading platform to receive NCPG membership.
NCPG welcomes prediction markets
Kalshi was revealed as a platinum NCPG member in May, at which time the platform also provided a $2 million grant.
The NCPG created the Financial Services & Trading membership category to accommodate Kalshi and other prediction platforms, although none applied for membership in the three-plus months since. It also launched the Financial Trader Health and Safety Initiative with the $2 million contribution.
Several state gaming bodies were aggrieved by the NCPG’s open-arms policy for prediction markets. These same gaming groups had largely taken issue with the spread of sports event contracts, which local regulators believe mimic sports betting odds without requiring the platforms to receive state licensing.
An NCPG official revealed that the Group views event contracts as a form of gambling, and that makes it its responsibility to intervene.
“Regardless of how prediction markets are currently legally defined, NCPG believes it is functionally gambling and can expose consumers to many of the same risks and harms associated with traditional gambling,” Derek Longmeier, board president of the NCPG, said on Tuesday. “The exposure today—in scale, in speed, and in reach to new and often young users—is unprecedented."
Longmeier also clarified the NCPG’s main focus.
While court systems across the country are determining the authority of prediction markets in real time, the NCPG is concerned with preventing the negative effects of gambling and related activities.
“NCPG is neutral on whether prediction markets should be legal,” he said. “We are not neutral on the need to prevent and reduce gambling-related harm wherever it occurs.”
A neutral outlook
Just like state gaming officials have long believed that prediction markets should be subjected to state regulation, and trading platforms claim they fall under the Commodity Futures Trading Commission’s oversight, the NCPG has consistently claimed neutrality in legal disputes.
That’s not just for prediction markets. The nonprofit’s official stance is that it does not support or oppose the legalization of gambling, but rather, it hopes to make the practice as safe as possible. Member organizations and donors also do not control its research, advocacy, or policy.
No other prediction platforms, including Polymarket, Robinhood, Underdog, or any others, have joined the NCPG.
Longmeier denounced claims that the NCGP created the Financial Services & Trading membership because Kalshi paid it $2 million. Instead, it said the extraordinary growth of prediction markets necessitated the membership because of gambling-like threats that were posted to consumers.
“People are experiencing real financial, emotional, and relationship consequences as a result of prediction markets,” Longmeier claimed. “The harm is not theoretical, and we cannot wait to act.”
Despite the rationale, the NCPG lost three state gaming organization members after it welcomed Kalshi into its membership.
The Michigan Gaming Control Board (MGCB), Ohio Casino Control Commission, and Nevada Council on Problem Gambling — all representing states that oppose sports event contracts — canceled their memberships.
“By partnering with a company that numerous states, including Michigan, are actively litigating against for disregarding state gaming laws, NCPG directly undermines state enforcement actions and risks weakening the positions of state regulatory bodies nationwide,” MGCB Executive Director Henry Williams wrote after the decision was announced in July.
The Trade Handle Prediction Markets Take
The NCPG is in a sympathetic position because of its stance that it does not support or oppose legalization of gambling. In fact, it actually supports state gaming interest holders in saying that prediction markets provide gambling services, contrary to their claims. However, forcing opposing groups to intermingle when billions of dollars are at stake rarely works out well, as the NCPG is finding out.