On Aug. 6, Polymarket Sports declared on social media that the WNBA had put in place a “no bag policy” for “tonight’s WNBA game” to stem the tide of dildos being thrown on the court. 

The only problem: The post appeared to be entirely made up. The only WNBA game that night was at the Golden State Valkyries, and the team told Front Office Sports they made no such policy. 

Polymarket isn’t the only prediction market or betting company with an outlandish and sometimes offensive online presence.

Last week, a “paid affiliate” account of Kalshi posted, “all 55 million visa holders in the U.S. are being reviewed for deportable violations,” and when another user responded “deport all Indians,” the Kalshi affiliate replied with a finger emoji pointing up at that comment, signaling agreement.

Kalshi quickly cut ties with that account, which was part of a “badge” program that places Kalshi’s logo next to the handle of influential accounts, saying, “we have zero tolerance for this behavior.” 

The next day, Kalshi sent out its 2025 college football preview newsletter with an AI-generated image of Joe Biden in a diaper. 

Polymarket’s false post about the WNBA is still up, and it has plenty of other controversial posts, such as one six days ago speculating on whom Chargers quarterback Justin Herbert is “allegedly fuckin.”

The incidents show how prediction markets exist in an environment with little to no oversight. As gambling analyst Dustin Gouker put it: “If FanDuel or DraftKings had an account with their brand on the Twitter handle agreeing with Nazi sentiments, we might be talking about licenses being lost.”

Kalshi is not at risk of losing sports betting licenses, because it has no sports betting licenses. Instead, the company’s event contracts—which allow users to “trade” on the outcome of future events—are available in all 50 states after it self-certified with the Commodity Futures Trading Commission, which regulates the trading of commodities like grains and oil, but also sports when considered in a trading context. 

Kalshi doesn’t operate like a traditional sportsbook, which would require approval from regulators in each state it operates. That means it’s free to be as provocative as it wants, unlike media brand Barstool Sports, whose history of offensive content gave state gambling regulators pause and ultimately led to betting company Penn Entertainment selling the company back to founder Dave Portnoy for $1. 

Regulators in at least seven states have pushed back against Kalshi but for entirely separate reasons: They say the company should be regulated like a sportsbook. 

Kalshi has in turn sued in Nevada, New Jersey, and Maryland. After scoring early victories in Nevada and New Jersey, it suffered its first legal setback in Maryland. Kalshi maintains it falls under the “exclusive” jurisdiction of the CFTC, and the company has a lot of current political support. It lists Donald Trump Jr., the president’s son, as a “strategic advisor.”

Polymarket, meanwhile, is not currently legal in the U.S. and has leaned in to provocation more directly, with examples including one post showing an AI-generated image of Luka Dončić if he were much heavier, or another describing a Shedeur Sanders preseason performance as “ass.”

The company recently escaped a federal probe that centered on whether it was accepting trades from U.S.-based users. It is primed to reenter the U.S. market after this summer’s acquisition of the QCX exchange. The company has been running ads suggesting it will be available in the U.S. any day now, and reportedly its reentry could take place within the next two weeks.

For now, it’s still an unregulated exchange that has promoted markets on whether a dildo will be thrown at a WNBA game.

Kalshi spokesperson Sara Slane recently told FOS that Polymarket’s dildo markets are “completely unacceptable, disgusting, and appalling.” 

“It’s beyond frustrating to sit on the sidelines and see stuff like that happen,” she says. “It paints us—a legal, federally regulated exchange—with a terrible paintbrush.”

Melinda Roth, a professor at Washington and Lee University School of Law, tells FOS there are much bigger questions at play in prediction markets. For one, there’s the issue of potential market manipulation. 

“The bigger story isn’t about sex toys or rogue affiliates—it’s about integrity,” Roth says. “The issue is, can you offer a market and then be able to manipulate that market by sending crypto bros to throw the toys onto the court?”

Meanwhile, Roth isn’t sure the states will be able to wrangle regulation of prediction markets away from the federal government. Both Kalshi and Polymarket offer many event contracts that have nothing to do with sports, such as what words President Trump will say when he meets with the president of South Korea or whether MrBeast will raise $40 million for clean water by Aug. 31. 

If it was determined that sports event contracts must be regulated on a state-by-state basis, that could mean these companies’ offerings would need to be carved up—with non-sports event contracts regulated by the CFTC but sports event contracts regulated on a state-by-state basis.

“It’s really strange to think about having a CFTC-regulated exchange that’s legal for some products but not others,” Roth says. “Even if 70% of the markets are sports, you still have economic and political contracts that fall outside state oversight—and all of that costs real money to defend.”

The CFTC and Polymarket did not immediately respond to requests for comment.

Donald Trump Jr. is investing in prediction-markets exchange Polymarket through his venture capital firm, a curious move that could create the appearance of a conflict of interest since the president’s son is separately a “strategic advisor” for rival Kalshi.

As part of the undisclosed investment from Palm Beach, Fla.–based 1789 Capital, Trump Jr. will also join Polymarket’s advisory board, according to a statement. The firm is injecting “double-digit millions of dollars” into Polymarket, Axios reported.

The news comes as Polymarket has been making a push to reenter the U.S. market. It has been banned from operating in the country as part of a 2022 settlement with the Biden Administration.

Other recent moves signaling the imminent reentry into the U.S. include the company’s June agreement to become the official prediction markets partner for X/Twitter, the announcement a few weeks later by Polymarket founder Shayne Coplan that the company had “been cleared of any wrongdoing” in a federal investigation, and its July acquisition of QCX, a small derivatives exchange that was recently licensed by the Commodity Futures Trading Commission. Coplan was the subject of an FBI raid last year, with agents taking electronics from his apartment. In his words, they were “looking for anything that could imply foul play.”

Additionally, the company has been running ads suggesting it will be available in the U.S. any day now, and reportedly its reentry could take place within the next two weeks.

Trump Jr., who has been a strategic advisor to Kalshi since January, said in Tuesday’s press release that “the U.S. needs to access this important platform.”

A spokesman for Trump Jr. tells Front Office Sports “This doesn’t change anything regarding Don’s role with Kalshi. Don is committed to supporting the prediction market industry as a whole and couldn’t be more excited about his new role with Polymarket.”

Kalshi declined to comment. When the company announced it was bringing him on, Kalshi said Trump Jr.’s “bold business mindset and deep understanding of market dynamics perfectly align with Kalshi’s mission to redefine how America engages with information.”

Trump Jr. being involved with both Polymarket and Kalshi is odd, although it’s not clear whether this rises to the level of a legal or regulatory conflict of interest. Trump Jr.’s role with Kalshi is a paid position, according to Axios. 

Polymarket and Kalshi are rivals in the nascent, but growing, area of prediction markets. 

Both companies have engaged in outlandish behavior, including on social media and through some of the event contracts they offer. They also both recently raised millions of dollars; in June, one day after Bloomberg reported Peter Thiel’s Founders Fund led a more than $200 million investment in Polymarket at a $1 billion valuation, Kalshi scored $185 million in a funding round led by crypto-focused venture capital firm Paradigm.

Prediction-market platforms like Kalshi and Polymarket give users the ability to trade money on outcomes of events, such as whether there will be a recession this year or whether it will rain in New York City today. As of this year, both companies offer sports event contracts, which allow users to trade on matters like which team will win a given game. 

The sports offerings have drawn the ire of state regulators, which have jurisdiction over sports gambling, and the NFL has warned that their offerings are identical to traditional sports betting—but with less oversight and regulation.

Representatives for the CFTC and 1789 Capital did not immediately respond to requests for comment. 

Companies offering sports prediction markets have insisted for months that they are different from traditional sportsbooks.

One place where that view doesn’t hold water: the NFL.

The league said Monday that it views prediction markets the same way it views traditional sports betting—and thus subject to the same concerns about integrity and compliance, meaning players and league personnel are not allowed to use platforms like Kalshi and Polymarket to trade on sports events, for now.

League officials made that clear during a Monday media call about sports betting, emphasizing that sports prediction markets offered by platforms like Kalshi, Robinhood, and Polymarket raise many of the same red flags as traditional sportsbooks. 

Prediction-market platforms give users the ability to trade money on outcomes, including which team will win a given game. Kalshi recently announced an expansion of its sports event contracts that allows users to put money on how many touchdowns a given player will score in a game, point spreads, and the overall total score. The contracts strongly resemble prop bets.

Asked about the rise of prediction-market platforms, David Highhill, the league’s VP for sports betting, pointed to public comments the league made last summer during an open comment period from the Commodity Futures Trading Commission. In those comments, the NFL cautioned that sports event contracts could jeopardize the integrity of the game because they would not have the same strict oversight as legalized sports betting.

Highhill elaborated, saying that “for now,” prediction markets lack certain regulatory requirements that traditional sportsbooks are subject to, such as information sharing with leagues, integrity monitoring, and prohibitions on certain types of markets that could be subject to influence.

The latter has emerged as a major concern in U.S. sports, with at least 16 states banning prop bets in college sports, Ohio considering banning prop bets entirely, and the NBA and its players’ union supporting some restrictions on prop bets.

“We’re concerned that if these markets aren’t properly regulated, they could be susceptible to manipulation or price distortion,” Highhill said.

Sabrina Perel, VP and chief compliance officer for the NFL, put it plainly: “On the policy side, our view is that these platforms mimic sports betting, and they are covered as prohibited conduct under our policy.”

She said the league is “actively educating” personnel on that point and making clear that engaging on these platforms is “prohibited.”

Sports event contracts have faced scrutiny because they appear so similar to betting, although Kalshi has maintained in court cases with regulators in Nevada, New Jersey, and Maryland that there is a distinction: on its exchange, bettors are wagering against one another as opposed to the house. After securing early victories in Nevada and New Jersey, a federal judge in Maryland recently ruled that Kalshi must comply with gambling laws in that state—although the regulator has agreed not to enforce its laws at least until the 4th Circuit rules on Kalshi’s appeal.

Prediction-market momentum has been picking up speed ahead of football season. In addition to Kalshi’s expanded offerings, Robinhood recently announced it would reactivate sports offerings in New Jersey and Nevada, and it sued the regulators in those states. Meanwhile, all the major sportsbooks have made clear they are watching the space, and FanDuel last week announced it will enter the prediction-markets space through a deal with derivatives exchange CME Group, but without sports offerings, at least to start.