Digital gambling in the United States is an evolving landscape. Online slots and table games remain illegal and unregulated for most of the country (view map) which makes sports the focal point for those with a penchant for contests of chance. In 2018, the federal ban on sports betting was struck down by the U.S. Supreme Court, and ever since the nation has been trying to find a healthy balance between the activity as a supporter of economic growth and form of entertainment. Doing so has been a challenge because few anticipated how fast the industry would grow, leaving little time to act quickly and adapt to concerning consumer behavior. Adding a layer of complexity is the introduction of related digital products and services, with online sports trading entering the country and shaking things up. It was introduced in the United States at the onset of 2025.
What’s the difference between online sports trading and sports betting? Online sports betting is a recognized form of gambling in which an individual registers with an online sportsbook and wagers money on outcomes or specific aspects of sporting events. Meanwhile, online sports trading involves buying and selling positions on either/or outcomes of specific sports events, similar to how stocks or commodities are traded on financial markets. These are surface level definitions, mind you, and there is no shortage of online resources to provide a succinct breakdown of how each works. While we will touch on some of these differentiating aspects below, the focus is primarily on how the differences between the two make mental health management for a large segment of the American population particularly challenging.
Overview of Online Sports Betting vs Sports Trading When it Comes to Mental Health Concerns Among Vulnerable Americans
I. SEPARATE REGULATORY BODIES
Who Regulates Sports Betting
Online sports betting is primarily regulated at the state level, not by the federal government. For example, in New York, all aspects of legal gaming activity (including licensing and enforcing compliance with regulations) are regulated by the New York State Gaming Commission (NYSGC). Meanwhile, in unique instances, it is a shared responsibility. For instance, online sports betting in Florida is regulated under a dual structure involving the Florida Gaming Control Commission (FGCC) and the Seminole Tribal Gaming Commission (STGC).
Who Regulates Sports Trading
Online sports trading on prediction markets are primarily regulated at the federal level by the Commodity Futures Trading Commission (CFTC), which classifies them as financial instruments known as “event contracts”. This contrasts with online sports betting, which is as detailed above is regulated on a state-by-state basis by state gaming commissions.
Mental Health Implications
In U.S. states where online sports betting is legal, state regulators have devised strategies and reinvested a portion of revenues for managing the mental health of gambling residents. Some have invested more heavily than others. For example, Colorado has invested in programs for problem gambling treatment for uniquely vulnerable populations (view here) while Florida has partnered with Playwise to help manage problem gambling among its residents. Meanwhile, as a large federal body, the CFTC is not closely monitoring public health impacts specific to sports trading on prediction markets. There are no federally sanctioned “responsible participation” mandates for online sports trading in play, no specific protections, and no federal facilitations to connect compromised sports traders to mental health providers.
II. LEGISLATION AND LEGALITIES
Where is Online Sports Betting Legal?
At of December 2025, sports betting (retail and online) is legal and operational in 38 U.S. states (plus Washington, DC, and Puerto Rico). Online sports betting specifically, is legal in 30 U.S. states.
Where is Online Sports Trading Legal
Online sports trading is legal in all U.S. states. A number of state regulators have issued Cease & Desist letters (view which ones) but thus far prediction market operators offering sports trading have not been excluded from operating in any state.
Mental Health Implications
Because it is regulated by the CFTC and is not technically designated as a form of gambling, online sports trading is offered across the entirety of the United States. This means that it operates without the same state protections in place for online sports betting or any other regulated form of gambling activity in the country. This is problematic. For instance, prediction market (and sports trading) operators are not federally required to offer self-exclusion programs because they are regulated as financial exchanges. Further, while the CFTC has oversight over prediction markets, their advertising regulations for these markets are primarily governed by general rules against false and misleading advertising, similar to those for other financial products. They do not account for the nuances regarding certain types of language and advertising methods that online sports betting operators initially used (prior to recent restrictions). In addition, online sports trading platforms allow the use of cryptocurrency, whereas regulated online sports betting platforms do not. This too can be an issue from a mental health perspective as cryptocurrency is a technology that is designed to encourage and facilitate microtransactions – something that fosters an environment of impulsive spending behavior.
III. HOW BETS / TRADES ARE MADE
How Sports Bets Are Made
Regulated online sports bets are made through licensed (in the United States) online sportsbooks and mobile apps via an initial sign-up for an account, depositing of funds, selection a bet, and placing the wager based upon a variety of odds being offered. Odds types include those detailed below.
- Moneyline: This is a straightforward wager where a player picks which team or player they predict to win a game or event outright, regardless of the margin of victory.
- Point spread: This is a type of wager where the pay-off is based on the accuracy of the wager, rather than a straightforward “win or lose” outcome. For example, instead of a moneyline bet for the New England Patriots to outright defeat the underdog New York Jets (NFL), a spread bettor may wager on the favored Patriots to win by 7 or more points (+7). For the Patriots to cover the spread, they must win by more than seven points. If they do, the bettor wins. Moreover, the bettor often wins more than they would on a standard win/lose moneyline wager.
- Over Under: Also referred to as a Totals bet, it is a wager on whether the total combined points (or goals, runs, etc.) scored by both teams in a game will be Over or Under a specific value set by the sportsbook.
- Parlay: This is a single, “all-or-nothing” wager that combines two or more individual bets, known as “selections”. For the parlay to win, every single selection within the single bet must be successful. If even one selection loses, the entire parlay loses. An option often offered within parlay betting, is a teaser bet, which allows a player to adjust the point spread or the game total (Over/Under) in their perceived favor by a specific number of points. This makes the bet relatively easier to win compared to a standard parlay, but in exchange, the potential payout is significantly lower.
- Prop bets: Unlike with moneyline or point spread wagers, typical prop bets are types of wagers on parts of a game or sporting event that do not directly relate to the final win/loss outcome. They have been created by sportsbooks and daily fantasy sports (DFS) operators to offer a wider variety of in-game and cross-sport betting opportunities.
- Futures bet: This is a wager placed on a long-term outcome of a sports season, tournament, or event, rather than a single game. The bet is made well in advance of the outcome being decided, which can be weeks or months into the future. For example, within a day of the conclusion of an NFL Super Bowl, sportsbooks release actionable odds on who will win the next Super Bowl, using the moneyline odds format to determine future payouts.
- Live bets: Also referred to as in-play or in-game betting, this is the practice of placing wagers on a sporting event while it is in progress. Unlike traditional pre-game betting where all wagers are placed before the event begins, live betting allows a player to react to the action on the court or field in real-time.
How Sports Trades Are Made
In prediction market sports trading, participants register through licensed operators and mobile apps via an initial sign-up for an account, depositing of funds, selection of “event contracts”. Participants purchase event contracts that represent a specific outcome, which is generally a binary “YES” or “NO” outcome (i.e. win or loss) for an sports event. The price of the contract reflects the perceived probability of that outcome occurring, just like a moneyline or point spread wager. Participants can buy or sell these contracts at any time before the event is settled, much like trading stocks. The “odds” are not fixed by oddsmakers (i.e. sportsbooks) but are determined by supply and demand within the market, reflecting the collective opinion of all participants. This is similar to how sportsbook odds change as the volume of bets placed on a particular outcome change, which helps the operator manage its risk.
Mental Health Implications
Technically, sports betting features a greater number wager types (compared to sports trading) that are more complex and can leverage a vulnerability to impulsive behavior among certain player demographics. We have provided resources to learn more about how certain sports betting wager types contribute to the problem gambling crises in America through the following links:
What Makes Prop Bets a Problem for Vulnerable Gamblers
The Dangers of Player Prop Parlays
Spread Betting Risks to Problem Gamblers
However, the simplicity of sports trading means that there is a shallow learning curve which may theoretically attract a wider audience, while at the same time serving as a gateway to traditional sports betting. Within this wider audience that may be drawn to sports trading because of it’s shallow learning curve, are those who may exhibit impulsive behavior. This includes young 18+ year old males who do not have the frontal lobe development to properly evaluate their decisions and those with developmental disorders or neurocognitive disorders. This is on top of those detailed in the summary of mental health concerns related to problem gambling below. Furthermore, the act of investing in a “YES” or “NO” outcome (i.e. win or loss) for an sports event functions a lot like the bet types detailed above for online sportsbooks. This includes “combos” or multi-leg contracts which essentially mirror parlays.
IV. KNOWN MENTAL HEALTH CONCERNS
Mental Health Concerns in Online Sports Betting
As a sibling to Kindbridge Behavioral Health (KBH), Kindbridge Research Institute (KRI) and other experts have extensively researched problematic gambling behavior. Collectively, we have identified vulnerable populations, the negative consequences on their wellbeing, comorbid mental health issues, and importantly – effective treatment strategies. Click the links below to learn more about each.
Who is Most Vulnerable to Problematic Sports Betting Behavior
Signs and Symptoms of Problematic Sports Betting Behavior
Mental Health Issues Linked to Problematic Sports Betting Behavior
Effective Treatments for Problematic Sports Betting Behavior
Mental Health Concerns in Online Sports Trading
Because sports trading is new, there is not yet enough data to identify specific issues for those engaged in the activity. Assumptions can be made based on known patterns of behavior and comorbidities associated with problem gambling and problem day trading. But alas, the nation is deep into unknown territory when it comes to online sports trading. Monitoring, information gathering, and data analysis from experts in the field needs to occur, beginning today, so that issues are addressed in a timely manner. Otherwise, vulnerable populations (some of whom are not yet identified) will be compromised which will compound the mental / behavioral health crisis in the United States. The CFTC and public health officials in each U.S. state together with sports trading operators are called upon to make this investment by connecting to said experts.
The nation can learn from the handling of online sports betting to ensure that similar issues do not arise with sports trading.
*Kindbridge is America’s leading virtual support provider and researcher in the realm of problem gambling, gaming, and trading. Regulators, public health officials, and operators are encouraged to connect to Kindbridge to discuss a strategy for online sports trading. Call 1 (877) 426 4258 or email us today.
