The new prediction-driven gambling boom

In the lead-up to the United States bombing Iran in February, an unknown person created an account on the prediction market Polymarket, placed two bets that the United States would strike the country by the end of the month, and won more than $85,000.

For market watchers, the bet—and others like it—sparked concerns over insider trading. For many addiction psychologists, in contrast, the spotlight on Polymarket highlighted what they’ve been grappling with as regulations on gambling in the United States have relaxed over the past 8 years: a dizzying array of new betting action directed at a growing marketplace of users.

“We’re seeing how gambling is evolving in terms of not just accessibility but in what people can bet on,” said Andrew Hyounsoo Kim, PhD, a clinical psychologist at Toronto Metropolitan University who specializes in addiction.

Since a 2018 Supreme Court decision paved the way for states to regulate their own legal sports-gambling programs, online betting has exploded. Now, in addition to traditional bets over the victor of a game, sports bettors can also place nearly continuous “prop bets” on minor events, such as the outcome of the next play. And prediction markets, which are regulated like financial markets rather than gambling sites, expand the new normal of online sports betting into any aspect of life, from how many times Elon Musk will tweet today to the number of magnitude 7.0 earthquakes that will happen this year.

Researchers who study problem gambling are hustling to keep up. They’re learning that online gamblers aren’t quite like the old-timers who used to gather at the horse track, just as playing slots on a phone screen in bed is significantly different from visiting a casino. They’re also seeking new ways to ensure people who do develop a gambling disorder can reach help, a challenging aim considering that less than 10% of people with gambling problems actually seek treatment (National Gambling Impact Study Commission Final Report, 1999opens in new window).

Though there are no nationally representative numbers for who gambles online, a February 2025 poll by Siena College Research Institute and St. Bonaventure University’s Jandoli School of Communication found that 22% of Americans and almost half of men ages 18 to 49 have at least one active online sports-betting account. A 2025 consumer survey by S&P Globalopens in new window found that 15% of internet-using adults in the United States reported placing a sports bet in the past year (Nissan, K., “Who Are America’s Sports Bettors?,” S&P Global, June 27, 2025opens in new window). As of March 2026, 39 states and the District of Columbia had legalized sports betting, with 30 allowing mobile sports betting. Meanwhile, seven states allow mobile casino games such as blackjack or slots using real money.

Prediction markets, on the other hand, are only regulated at the federal level by the Commodity Futures Trading Commission. The sites emerged in the 2020s, and to participate, users need to be only 18 or older; sites verify via user-submitted government ID. (Ongoing legal battles could affect where these markets are accessible, as dozens of states are attempting to regulate them under gambling laws.) There is little research on those users so far, said Debi LaPlante, PhD, a social psychologist at Harvard Medical School. LaPlante’s research has found an overlap in interest in day trading and cryptocurrency with interest in higher-risk gambling and gambling-related problems, especially for people who tie money to self-concept (Journal of Gambling Studies, Vol. 41, No. 1, 2025opens in new window). That might hint at a group of people primed for the risky use of prediction markets, but the potential for developing a gambling problem via these markets is still unknown.

Problem gambling is not new, and it is frequently comorbid with substance use disorders and emotional disorders (Moreira, D., et al., Journal of Gambling Studies, Vol. 39, No. 2, 2023opens in new window). But some research suggests that online gamblers are a bit different from gamblers who play in person. Online gamblers are more likely to be male and young, with a higher level of education and income (Ghelfi, M., et al., Journal of Gambling Studies, Vol. 40, No. 2, 2024opens in new window). They’re more likely to gamble more frequently, to make a wider variety of bets, to gamble for longer periods, and to make higher bets. They’re also more likely to be at risk of a gambling problem.

Pennsylvania’s Gaming Control Board reported in 2025 that requests for online self-exclusion, a practice by which individuals can voluntarily block themselves from gambling apps by providing a government ID, rose from 2,200 in 2023 to 3,500 in 2024, a 60% increase. Other states have reported similar increases. Studies find that self-exclusion is an effective way for people with problem gambling to spend less and gamble less. People who self-exclude also report less need for formal treatment. But the overall number of problem gamblers who use self-exclusion is only 15% worldwide (Yakovenko, I., & Hodgins, D. C., Internet Interventions, Vol. 23, 2021opens in new window; Bijker, R., et al., Current Addiction Reports, Vol. 10, 2023opens in new window).

Adolescents may be at particular risk for developing problem gambling because of a tendency to engage in risk-taking behaviors (Chambers, R. A., et al., The American Journal of Psychiatry, Vol. 160, No. 6, 2003opens in new window). Circumventing age restrictions, teens may use parental accounts to gamble, visit foreign casino sites that use cryptocurrency, and use the less-regulated prediction market sites for betting. Starting young is a predictor for later gambling troubles, said Jeffrey Derevensky, PhD, a professor of education and counseling psychology at McGill University who studies youth gambling. Another predictor is an early big win, but “big” is relative. It may take a much smaller monetary amount to suck in teens or young adults than it would take to hook an older, financially established adult, Derevensky said.

Peer influence is another important predictor of problem gambling in adolescent boys, said Michael Robb, PhD, a developmental psychologist and the head of research at Common Sense Media. A recent report by the organization found that 15% of boys who lost less than $50 a year on gambling or in-game gambling-like activities said peers influenced their behavior; among higher-risk boys who lost more than $50 a year, 34% cited their peers as one reason they gambled (Betting on Boys: Understanding Gambling Among Adolescent Boys, 2026opens in new window). “We see very strong peer effects in the data,” Robb said. “Adolescents are highly influenced by what their peers are doing, so when gambling is present in a friend group, it can start to feel normal within that group.”

While that doesn’t mean all gambling will lead to problems, early socially reinforced behaviors are linked to a higher likelihood of problematic gambling later, he said.

As mobile gambling has expanded, it has also become more gamified—often offering youth a seamless transition from playing video games to gambling (see July/August 2023 Monitor). Apps, once downloaded, tempt users with automatic push notifications and strategies that might feel familiar to users of apps like Duolingo, such as rewards for engaging in long “streaks” of activity. Advertising has flourished, with offers of sign-up bonuses and celebrity influencers: It’s nearly impossible to watch an NBA or NFL game without seeing references to sports betting. And whereas sports betting used to involve a single bet on the outcome of a game, the advent of innumerable prop bets throughout a game makes gambling more continuous, a known risk factor for behavioral addiction.

“A lot of these new gambling games or gambling-like activities are on the higher end of the risk spectrum,” Kim said. Prediction markets tend to have a slower pace than prop betting, paying out on the order of days or months, he said, but they do trigger a “pseudoskill” factor, in which users might feel they have some kind of expertise that will guarantee success. That, too, is a risk factor for problem behavior, Kim said.

Given the proliferation of apps calibrated to ping the brain’s reward system, there are already lawsuits against gambling companies alleging predatory behavior. Kavita Fischer, MD, a Pennsylvania-based psychiatrist, brought one of these suits against a betting company after losing more than $150,000 on one app over 4 months. The lawsuit alleges that one feature that kept Fischer hooked was a VIP host who offered bonuses and credits to keep coming back, even when Fischer told the host she needed to quit.

“It’s important to realize that gambling harm can’t be explained just by individual vulnerability,” Fischer said. “The research shows that having higher access to rapid-play apps can increase the risk for a problem.”

Problematic gambling is indeed more frequent where gambling is easier to access, research shows (Gavriel-Fried, B., et al., Current Psychology, Vol. 42, 2023opens in new window). With the recent liberalization of online gambling in the United States, experts say that inevitably more people will need treatment.

The therapeutic treatment for online problem gambling is similar to what works for traditional gambling disorder. Cognitive behavioral treatments have a strong evidence base, especially when combined with motivational interviewing (Pfund, R. A., et al., Clinical Psychology Review, Vol. 105, 2023opens in new window). This treatment often involves building healthy alternative activities and routines, said David Hodgins, PhD, a clinical psychologist at the University of Calgary who studies gambling.

Clinicians who work with people with problem gambling often help patients set up systems for financial accountability, including granting access to banking information to trusted family or friends so it’s harder to move money around. “I have to get all the money off my phone, all the apps off my phone, all the social media off my phone,” Fischer said.

State regulatory bodies have long-standing programs for self-exclusion, which allow people to voluntarily register with their state to be banned from casinos and online sportsbooks. Less formally, game-blocking apps such as Gamban can prevent users from accessing thousands of apps and websites.

The trick is catching people before they find themselves in serious financial trouble. Complicating the issue for younger gamblers is the fact that traditional support group programs like Gamblers Anonymous (GA), which can meet in-person or online, aren’t always a good fit. Young digital bettors may find little in common with older casino gamblers, and they may come away feeling less alarmed about their gambling than before when they encounter older group members who are in a deeper financial hole, Derevensky said.

Given how few problem gamblers ever seek formal treatment, researchers need to do more to figure out how to support self-recovery, Hodgins said. One option, he said, is to explore digital models of care, gamifying treatment in the same way apps gamify gambling.

Because gambling disorder is so often comorbid with other mental health conditions, experts suggest adding gambling problems to mental health screening in primary care or mental health care settings. The two-question “lie-bet” questionnaire asks if someone has ever felt the need to bet more and more money and if they have ever had to lie to people close to them about how much they gamble—two warning signs for gambling disorder. More generally, Fischer said, clinicians can ask open-ended questions about financial stressors or how people spend their money on entertainment. “Any time a psych evaluation is done, it’s an opportunity to catch this,” she said.

Opportunities for intervention also abound within the apps themselves. Online gambling operators gather massive amounts of data on user behavior, and some researchers are identifying red flags that may suggest someone could be on their way to developing a problem. The idea is that an algorithm would look for clusters of these behaviors and automatically institute a cooling-off period that stops the user from making bets for a certain amount of time.

Some of these markers of harm include spending more than 4 hours a day gambling, spending large amounts of money gambling or spending more and more money over time, reloading one’s virtual wallet during a gambling session, playing a large variety of games or making bets in wide-ranging amounts, and immediately plowing winnings back into more gambling, said Mark Griffiths, PhD, a chartered psychologist and distinguished emeritus professor of behavioral addictions at Nottingham Trent University in the United Kingdom. Problem gamblers also often gamble early in the morning or late at night, Derevensky said. An American who bets on daytime Ping-Pong matches in China might be on a bad path, for example.

Voluntary limit-setting on betting is one of the most effective safer-gambling strategies, Griffiths said (Acta Psychologica, Vol. 262, 2026opens in new window). Psychological research also suggests that mandatory cooling-off periods are helpful, Griffiths said, with longer cool-off periods working better than shorter ones (International Journal of Mental Health and Addiction, Vol. 22, 2024opens in new window). In contrast to mandatory cooling-off periods, pop-up notifications that nudge users to voluntarily take a break often work in lab studies but tend to have little effect in the real world, Griffiths said (Frontiers in Psychiatry, Vol. 11, 2021opens in new window).

Almost all states require operators to offer voluntary cooling-off periods of hours, days, or weeks and financial limit setting, but legislation mandating cool-off periods is rarer. One caveat to cooling-off periods and mandatory breaks is that there is no clear insight into how having access to multiple accounts affects behavior. It’s possible that people might hop from one app to another or spread bets over multiple apps to get around limits, Griffiths said.

The expansion of gambling has far outpaced society’s ability to respond. Even those who seek help may find that they face long waiting lists for qualified clinicians. One serious bottleneck is the availability of Spanish-speaking providers who specialize in gambling addiction, said Michael Campos, PhD, a clinical psychologist in private practice in Los Angeles.

Another missing piece is prevention programs for youth, said Corbin Evans, deputy chief of science and technology on APA’s Advocacy team. APA Advocacy is exploring partnerships with colleges and universities to work on this issue, he said.

APA is also advocating for legislation to ensure that some of the tax money collected from online gambling operations goes to gambling addiction treatment and prevention. The bipartisan Providing Opportunities for Individuals in Need of Treatment and Support (POINTS) Act, introduced into the House of Representatives in March 2026, would use federal excise tax dollars to fund prevention, treatment, and recovery to the tune of $100 million a year.

Studies have identified evidence-based harm reduction advice for gamblers, Hodgins said, with some of the most important messages being that it’s safest to gamble no more than weekly, to play no more than two types of games, and to spend no more than 1% of the family income on gambling (Keshani, I. M., et al., International Journal of Mental Health and Addiction, 2026opens in new window). Communicating this advice to the public might help people set healthy limits, he said.

How these messages will land among those who move between gaming, online gambling, prediction markets, and other risky financial arenas remains to be seen. It’s also not clear whether gambling-related messaging will resonate with users of prediction markets, as they may not identify as gamblers at all. Given the newness of these markets, Kim said, there is still a lot to learn about potential risks and harms.