Young adults under 21 trade billions on Kalshi amid explosive prediction market growth

Young adults between 18 and 21, who are generally too young to legally gamble at most US casinos and sportsbooks, have traded an estimated $5.4 billion on Kalshi this year, according to a new CNN analysis. The surge highlights growing concerns about prediction markets, which have rapidly expanded in popularity and allow users to trade contracts tied to events ranging from sports and elections to culture and weather.

Unlike traditional casinos and sportsbooks, which are largely regulated by individual states and typically require customers to be at least 21, prediction markets operate under federal financial-market rules. That means users can generally participate once they turn 18. The difference has prompted lawmakers, consumer advocates and addiction specialists to question whether prediction markets have created a loophole that exposes younger adults to financial risks and potentially harmful trading behavior.

Sports and parlays dominate trading

Sports and parlays, all-or-nothing combinations of bets that have become particularly popular among sports bettors, account for roughly 80% of Kalshi's overall trading volume. CNN's analysis estimates that users between 18 and 21 have traded approximately $3.9 billion across those categories this year alone. That figure could increase substantially as major sporting events continue to attract users.

“Normally you’d have a big summer lull, but the World Cup changed that completely,” said Jonathan Michaels, who runs a gaming industry consulting firm. “Prediction markets will also see record numbers this fall with the football season, and that’ll certainly trickle down into college-age students.” Kalshi has recorded more than $173 billion in total trading volume so far this year, based on publicly available figures from Paradigm, a major investor in the prediction-market company.

According to a Kalshi spokesperson, users aged 18 to 21 currently account for 3.14% of the company's overall trading volume.

CNN has a partnership with Kalshi and uses its data to report on major events. CNN editorial employees are prohibited from trading on prediction markets. Kalshi declined to provide CNN with detailed figures on the amount traded or spent specifically by users aged 18 to 21.

The company has previously highlighted several safeguards aimed at younger and potentially vulnerable users. These measures include deposit limits and warnings for accounts showing patterns associated with risky behaviour. Kalshi has also contributed $2 million to the National Council for Problem Gambling to support efforts aimed at addressing unhealthy trading and addiction.

Prediction markets dominate the US

Financial analysts estimated earlier this year that Kalshi controlled approximately 90% of the US prediction-market volume, making it by far the largest player in the sector. Polymarket, considered the second-largest US prediction market, declined to comment and has not publicly released trading or spending figures for users aged 18 to 21. The rapid growth of these platforms has also intensified a broader legal battle over whether sports-related prediction contracts should be treated as financial products or gambling.

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Legal battle over prediction markets continues

Prediction platforms currently operate as federally regulated financial exchanges and, under their current regulatory framework, are generally outside state gaming laws and taxes. The Commodity Futures Trading Commission (CFTC) oversees these markets at the federal level. That regulatory structure is facing a major legal challenge, however. The effort has received support from 44 state attorneys general, dozens of Indian tribes and the casino industry.

The American Gaming Association, which represents the casino industry, has long argued that sports contracts offered by prediction markets effectively function as unlicensed sportsbooks. The organization has pointed to Kalshi's trading figures among younger users as evidence of the concerns surrounding sports prediction contracts. “Most parents and grandparents don’t realize that the ‘prediction markets’ are offering a backdoor into sports-betting in jurisdictions where the legal betting age is 21,” AGA president Bill Miller told CNN. “This means their freshman son or daughter is prohibited from entering legal sportsbooks, but now they can just pull out their phone and use Kalshi to bet on football.”

Supporters of prediction markets counter that the platforms are financial exchanges rather than traditional gambling operators. They also note that Americans can legally open brokerage accounts at 18 and trade stocks and other financial products that can involve significant financial risk.

Calls grow for a 21+ trading age

The debate has prompted some prediction-market operators to voluntarily impose a minimum age of 21, despite federal rules generally allowing participation from users aged 18 and older. Fanatics, the sports merchandising giant, launched a prediction platform last year with a 21+ requirement.

A company spokesman previously told CNN, “We believe 21+ is the right age for any type of real-money activities.” Major sports organizations have also urged regulators to reconsider the current age requirement. The NCAA, NFL, NBA, PGA Tour and other sports leagues have called on the CFTC to increase the minimum age for prediction-market trading to 21. The agency rejected those calls and is moving toward federal regulations that would maintain the current 18+ eligibility standard.