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A Pennsylvania man who self-excluded from DraftKings and FanDuel after bankruptcy later found Kalshi through an Instagram ad and lost more than $25,000, NPR reported.

Identified by his middle name, Thomas said he began betting on DraftKings and FanDuel during the pandemic, mostly on football and tennis parlays. Over several years, he accumulated about $75,000 in credit-card and personal-loan debt and lost more than $50,000 on online sportsbooks.

Thomas filed for bankruptcy in late 2023, settled with most of his creditors and banned himself from DraftKings and FanDuel. He swore off gambling, but about two years later an Instagram promotion offering a $20 bonus for spending $10 introduced him to Kalshi.

He told NPR that his Kalshi bets grew from $10 to hundreds and then thousands of dollars, leaving him more than $25,000 in the red. After asking a live agent to close his account, he made three more requests by email over two days. Kalshi eventually barred him from betting.

The case highlights how state gambling protections can differ for prediction markets. NPR reported that Kalshi is federally supervised as a financial instrument known as a swap, rather than regulated by states as a gambling business. The story says Kalshi and Polymarket have not sought state approval and do not follow state-mandated protections for people with gambling addictions.

That distinction matters for people already on state self-exclusion lists. Pennsylvania's list blocks Thomas from casinos, mobile sports betting and other online betting, as well as direct marketing from betting operators, but it does not automatically bar him from prediction markets.

Kalshi disputes the comparison

Kalshi spokeswoman Dani Lever characterized Thomas's experience as a cherry-picked case and argued that an exchange model is healthier than a sportsbook model because the company's profits are not tied to traders' losses. The company also points to account limits, breaks and voluntary opt-outs as responsible-trading features.

The dispute over safeguards echoes broader concerns about how Kalshi's protections compare with those of gambling operators. NPR reported that Kalshi belongs to an industry self-exclusion program, but does not participate in state-run exclusion databases, which would require it to obtain a state gambling license.

Exclusion can end at the platform boundary

Abdullah Mahmood, a problem-gambling counselor at Maryhaven in Columbus, Ohio, told NPR that some clients who exclude themselves from sportsbooks later turn to prediction markets. Clinical psychologist Jesse Suh said the platforms present few obstacles to mobile gambling, while responsible-gambling advocate Brian Pempus argued that people use them as sports-betting apps.

The distinction between the products also shapes the safeguards available when betting escalates. Sportsbook promotions and responsible-gambling warnings form part of a separate operator framework; Thomas's experience shows that self-exclusion there did not prevent a move to Kalshi.

The legal framework for Kalshi's event contracts is contested by states and could ultimately reach the Supreme Court, NPR reported. Meanwhile, the platform's scale has grown sharply: TickerTracker data cited by NPR put wagers at nearly $60 billion in the last month, compared with $2.8 billion the previous September.

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Novig said trading volume rose nearly 94% and first-time depositors increased more than 218% across the 20 days before and after its Sept. 9 "Just Sports" campaign starring Sydney Sweeney, according to CNBC's report of co-founder Jacob Fortinsky's figures.

The company launched as a federally regulated prediction-market platform on Aug. 4. The campaign's timing also overlapped with the start of the NFL season, so the reported comparison does not establish that the advertisement alone drove the increase.

Growth across several measures

Novig also reported that active users climbed 96% month over month and 260% year over year in September. App downloads rose by more than 187%, while Fortinsky said he had not expected the campaign and NFL season kickoff together to bring in that level of activity.

The ad presented Novig as a sports-focused platform, with Sweeney describing its exclusions of contracts involving wars, deaths and politics. Fortinsky told CNBC that Sweeney approached the company about taking an equity stake because of that approach. Novig did not disclose the size of any stake.

The platform's Aug. 4 launch as a nationwide sports prediction market put it in front of customers in a competitive field. The new figures show a sharp rise in activity around its marketing push, but do not say how many newly acquired users continued trading afterward.

Backlash and operating choices

Some female athletes criticized the campaign, saying it could harm perceptions of women in sports. Fortinsky said the ad aimed to explain what Novig offers rather than represent female athletes, and that he respected the views expressed. He also said he and the team are fans of women's sports.

Novig sued multiple states shortly after launch, arguing that states cannot regulate its sports event contracts. It also limits platform access to users aged 21 and older; CNBC reported that Kalshi and Polymarket U.S. allow users over 18. Those choices set Novig's operating position apart from its competitors, while its state lawsuits put its view of the regulatory boundary at the center of its expansion strategy.

Competition and funding

Novig is competing with established prediction-market platforms including Kalshi and Polymarket, and it has also used sports partnerships to raise its profile. The company's partnership with the New York Mets is another example of that brand-building effort. Celebrity marketing can generate attention quickly; these figures alone do not show whether that attention will translate into sustained use.

The Wall Street Journal reported that Novig is raising funding at a $2 billion valuation. Forbes reported that the company raised a $75 million Series B in February at a $500 million valuation. Novig did not disclose the size of the new round or the participating investors, leaving its reported growth and fundraising ambitions as separate measures of how the business is progressing.

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New York has moved to sue Polymarket as prediction markets offer sports contracts outside the state's sportsbook tax framework, raising questions about a gambling-tax base worth more than $1 billion a year. The platforms argue that they operate as federally overseen derivatives exchanges, not under state gambling laws, a dispute that could shape where sports-related wagering is taxed.

The conflict puts a large revenue stream in focus. New York's legal and tax treatment of prediction-market contracts is also part of a broader debate over whether these products compete with licensed sportsbooks.

Even a small shift could cost millions

Mobile sports betting generated about $328 million in tax receipts for New York in the first quarter of 2026, according to the state comptroller's office. New York accounts for roughly one-third of all state tax collections on sports-betting revenue nationwide, while licensed sportsbooks face a 51% state tax rate.

A Tax Policy Center analysis estimates that if 1% of New York sportsbook activity shifted to prediction markets, the state could lose $13 million in revenue. That is a modeled estimate, not evidence that the shift has already happened. Polymarket and Kalshi have added sports-related contracts, giving customers another way to trade on sporting events.

Federally regulated prediction-market exchanges could compete with licensed sportsbooks while operating under a different regulatory framework. That distinction is central to the competition between prediction markets and sportsbooks, but the potential tax impact depends on whether customers actually move their activity.

Operators dispute the customer shift

DraftKings has offered one early indication that the audiences may differ: a company spokesperson said about 1% of its sportsbook customers overlap with Kalshi in states where sports betting is legal. That customer-overlap figure is separate from the Tax Policy Center's estimate, which models a 1% shift in sportsbook activity across New York.

Kalshi disputes that its growth is taking revenue from traditional sportsbooks. Company spokesperson Dani Lever said, "We can operate under federal regulation while continuing to generate vital tax revenue for states." Prediction-market operators maintain that federal oversight applies to their exchanges rather than state gambling laws; New York's position puts that claim in direct tension with the state's tax system.

Maria Doulis, New York State deputy comptroller for budget and policy analysis, said, "For a user, it’s not clear that engaging in activity on a prediction market is a substantially different activity than placing a wager on a mobile sports betting platform," and added, "But from the state’s perspective, those two activities are taxed differently and can yield two different outcomes."

Growth and gambling costs complicate the picture

Kalshi's trading volume rose nearly thirteenfold in the year after it added sports contracts. Polymarket also saw rapid growth after adding sports, according to a New York State Comptroller report. Those figures indicate expanding activity, but do not establish how much-if any-came from customers leaving state-licensed sportsbooks.

The fiscal stakes extend beyond tax receipts. Calls to New York's gambling hotline have risen 8.5% since 2020, and the state has doubled funding for problem-gambling services, from $6 million to $12 million. Prediction markets' growth could add to the state's policy challenge if more gambling activity shifts beyond its existing framework.

Sportsbook revenue can fluctuate even without competition from prediction markets. The New York Knicks' NBA Finals win, after entering the series as underdogs, led mobile sportsbooks to lose $14.4 million in gross revenue. Doulis said volatility-or a surge in prediction markets that affects sports-betting revenue-could have implications for state finances.

New York has not identified a hearing, deadline or other procedural next step in the account of its move against Polymarket. The unresolved question for the state is whether prediction markets can keep expanding without diverting enough sportsbook activity to make the tax impact more than a projection.

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