Watching the prediction markets fight unfold, it’s clear there’s no shortage of moving parts.
It has a crowded cast. There are state regulators, tribal gaming leaders, federal agencies, sportsbooks, and platforms trying to defend a business model that cuts across old regulatory lines.
From lawsuits and cease-and-desist orders to a larger fight over who gets to decide what these products actually are, the plot has plenty of conflict. But for all the drama and debate, what may be missing is a rearview mirror.
Jon Russell, a veteran sports-trading and integrity executive, has seen parts of this movie before.
Long before prediction markets landed in American courts and forced judges to wrestle with the question of where the line between trading ends and gambling begins, spread betting pushed the United Kingdom to confront a similar question: What happens when a product looks like finance, behaves like gambling, and refuses to stay in one regulatory box?
From where Russell sits, it’s that history that’s been missing from much of the debate over prediction markets in the United States.
Looking at his background, it’s easy to see why he takes that view. Russell has spent three decades in regulated sports betting. His career has spanned spread betting, sports trading, and integrity monitoring. He is a senior integrity advisor at BetTrust Solutions, and his previous roles include serving as a senior advisor to IC360 and director and global head of trading at Betway Group.
Russell was also the chair of the International Betting Integrity Association from 2019 to 2025, where he worked with international bodies including FIFA, UEFA, and the International Olympic Committee.
But in the context of prediction markets, the most relevant chapter may be where it all began: 1990s spread betting, a corner of the market where betting products were subject to financial-style regulation from the start.
In an in-depth interview with CasinoBeats, Russell said the U.S. debate is missing this older precedent from the other side of the Atlantic: spread betting, a product that has long sat near the boundary between financial trading and gambling.
He believes that history is important because it challenges the either/or framing that has shaped much of the debate over prediction markets.
Russell isn’t saying that prediction markets should be treated like spread betting or that the courts have an easy question in front of them. What he’s saying is that if these products borrow from both finance and gambling, the rules may need to reflect both sides.
“Yes, it’s gambling. Yes, it’s a financial product. I’m saying yes, it can be both,” Russell said. “There is a clear precedent for why this can be both things at the same time.”
Spread Betting Shows Why Product Structure Matters
Mention spread betting to the average American, and there’s a good chance they’ll respond with a blank stare. But for Russell, it’s one of the most useful historical comparisons for understanding the fight over prediction markets.
The product originated in financial markets. Customers could take a buy or sell position based on where they believed a share price would finish by the end of a day, week, month, or longer period.
“Spread betting was initially a purely financial product,” Russell said. “Its entire framework came from financial institutions and the performance of company shares.”
At some point, he said, “someone certainly joined the dots” and realized the same model could be applied to sports outcomes.
That’s the part Russell thinks is relevant to prediction markets today. When spread betting moved from finance to sports, it kept the financial-market logic of buying and selling around a projected outcome. The only thing that changed was the outcome itself: instead of a share price, the market could be based on, say, the total points scored in a football game.
Russell used an NFL game to explain how that worked. In a spread betting market, a firm might quote a total points range for a game between the Cowboys and Cardinals. If the customer thinks the final total will land below the lower end of the spread, they sell. If they think it will land above the upper end, they buy.
In that way, the sports version did not break from spread betting’s financial roots.
“The discipline is indistinguishable,” Russell said. “The mathematics behind it is exactly the same. The calculation of what you win or lose is exactly the same.”
And that’s where Russell sees the link to the current debate over prediction markets.
“So it’s essentially what’s happening with prediction markets now,” He explained. “Thirty years ago, the same thing happened at that point in time, only on this side of the Atlantic.”
Like prediction markets today, sports spread betting forced regulators to look beyond the underlying event and focus on how the product worked.
“In the U.K., spread betting on sporting outcomes is regulated by the Financial Conduct Authority. Fixed odds betting is regulated by the Gambling Commission,” Russell said. “Spreadex, a firm I helped launch into the U.K. market back in 2000, holds both licenses because it offers both products. The two licenses cover two structurally distinct products inside the same firm.”
That’s why Russell sees spread betting as such a useful comparison to what’s currently playing out across America. The lesson the U.S. can take from the U.K. is that regulators there didn’t treat every product related to a sports outcome the same way. Instead of focusing on the sporting event itself, they focused on the product’s structure.
“The U.K. decided where these products belonged by looking at the structure of the product,” Russell explained. “A variable-payout contract on a sporting outcome was treated as a financial derivative and licensed by the financial regulator. A fixed-odds bet was treated as a wager and licensed by the gambling regulator.”
It’s that precedent that Russell thinks the ongoing debate over prediction markets in the U.S. is at risk of overlooking. If prediction markets are straddling the boundary between trading and gambling, a more useful question is how these contracts work, not just what events they’re built around.
PointsBetting Adds a U.S. Twist to the Debate
The point Russell makes about product structure doesn’t stop with the U.K. In the U.S., there’s a more recent example that complicates the debate over prediction markets: PointsBetting.
PointsBet operated PointsBetting in more than a dozen states before Fanatics acquired the company’s U.S. business in 2024.
“PointsBetting is a variable-payout sports wagering product,” Russell said. “The customer wins or loses based on how far they were right or wrong. That is the same structural feature that defines a U.K. sports spread bet.”
It’s the “how far” structure that makes the comparison important. With a standard fixed-odds wager, the customer either wins or loses based on whether they picked the right side. PointsBetting worked differently: How much they won or lost depended on how far the outcome moved in their favor or against them.
In the U.K., Russell explained, that kind of structure puts sports spread betting under financial regulation. In the U.S., PointsBetting was licensed by state gaming regulators within their existing sports betting frameworks.
“In every state where PointsBet operated, the license was issued by the state gaming regulator,” he said. “The New Jersey Division of Gaming Enforcement, the Illinois Gaming Board, the Pennsylvania Gaming Control Board, and so on. State gambling regulators licensed variable-payout sports contracts inside their existing framework, alongside fixed-odds sportsbook products.”
It’s that history that Russell says makes it harder to reduce the current prediction markets fight to a clean trading-versus-betting divide. The question is not just whether sports event contracts resemble gambling or financial products, but why structurally similar products have been treated differently across regulatory systems.
“State gaming regulators in the U.S. have licensed several different product architectures over the past few years,” He said. “Traditional fixed odds, variable-payout sports wagering, peer-to-peer exchange matching through firms like Sporttrade and Prophet Exchange. How a federally registered designated contract market fits alongside that landscape is the question the courts are working through now.”
In many ways, that’s what makes the U.S. fight so difficult. The country has already licensed sports products that don’t fit neatly into a simple trading-versus-betting framework, just not through the regulatory structure that prediction market operators are now defending.
Betfair Shows How the U.K. Treated Exchange-Based Markets
Spread betting isn’t the only U.K. example Russell sees as important to the prediction markets debate in the U.S. Another is Betfair, which calls itself “the world’s biggest betting exchange,” and offers a slightly different lesson.
Unlike sports spread betting, Betfair wasn’t treated as a financial derivative. It’s relevant to the current discussion because it shows how the U.K. has already dealt with exchange-based, prediction-style markets on everyday events and handled them under the gambling framework from the start.
“We’ve had prediction markets for 26 years,” Russell said. “Betfair [was] the original company that launched pretty much exactly the same business model as Kalshi and Polymarket are operating in now in the early 2000s.”
In its early days, Betfair featured markets on a variety of everyday outcomes and public events, including whether it would rain in London, whether it would snow on Christmas Day, or what color hat the Queen would wear, Russell explained.
The problem was that those markets didn’t generate much volume.
“What they found very quickly is that those kinds of markets weren’t receiving any kind of turnover whatsoever,” Russell said. “People weren’t particularly interested in them. What they were interested in was the sports betting side of it.”
It’s something we’ve seen in the U.S., where sports drives the vast majority of trading volume on major prediction markets. While users can find event contracts for almost anything they can imagine on these platforms, sports have become the center of gravity because that’s where customer demand and liquidity are strongest.
The difference between Betfair’s path in the U.K. and what’s happening in the U.S. is that Betfair’s move toward sports didn’t create the same kind of classification fight now playing out in U.S. courts. There was debate, Russell said, but it stayed inside the gambling framework.
“Betfair has been classified as a gambling product in the U.K. since it launched in 2000,” he told us.
“There was significant debate in the early 2000s about how the exchange model fit existing bookmaker definitions, whether layers needed permits, and how the horse race levy applied. That debate, however, was always inside the sports gambling regulatory framework. Whether the product belonged with the financial regulator instead was not the question.”
Betfair offers a different lesson for the U.S. debate. Spread betting shows how a sports-outcome product can fall under financial regulation because of its structure. Betfair shows how an exchange-based sports market can look more like today’s prediction platforms and still be treated as gambling.
For Russell, Betfair’s recent Betfair Predicts launch shows how settled that distinction remains in the U.K. He described the product as “essentially a return to its origin story,” rather than a new regulatory category.
“It is a re-skin of the existing exchange, sitting inside the existing Gambling Commission license,” he said. “It was launched without any classification debate in the U.K.”
Trading vs. Betting: Labels Change How Users Understand Risk
Russell views the classification fight as bigger than regulators, courts, and operators. It is also about whether users think they are making a trade, placing a bet, or doing something in between.
The words “trading” and “betting” don’t carry the same cultural meaning, especially in the U.S. Betting still carries historical baggage, while trading implies Wall Street, financial sophistication, and, perhaps most importantly, legitimacy.
When asked why calling certain products trading instead of betting can change how users understand risk, Russell said betting is a “loaded term” that “carries connotations of the mob” and “running numbers.”
Trading, on the other hand, puts users in a different frame of mind. When you hear trading, “you’re immediately thinking about Wall Street, you’re thinking about legitimized financial transactions,” Russell said. “It’s framing it in a completely different perspective.”
The difference in how people interpret those two terms could influence the choices of users who might otherwise avoid a sportsbook but feel more comfortable with a platform that presents itself as an investment or trading platform.
“I think people who wouldn’t consider themselves to be betting are actually betting on a daily basis, because investing in sporting outcomes sounds a lot better than gambling on a football match,” Russell said.
There’s also the concern that the trading label may make users assume there’s protection that doesn’t exist. When a sports contract is presented as a trade, it might sound like something more sophisticated and possibly safer than a bet.
Russell said that the assumption could be wrong.
“You would assume the controls over a financial instrument would be considerably more than controls around a gambling outcome,” Russell said. “That’s not the case at all.”
In fact, he said, users may have more protection when placing a bet with a regulated sportsbook than when trading a sports event contract.
“You have far more protection and regulation and control in terms of responsible gambling and integrity management if you’re placing a sports bet,” Russell told us, “because [sports betting rules have] been built up over many, many years with all the guardrails and protections in place.”
Why Governance Must Catch Up With Prediction Markets
Ultimately, the question is bigger than how prediction markets end up being classified. It’s whether the rules for these markets can keep up with how people actually use them.
Russell’s concern isn’t limited to who wins the legal argument in the U.S. What concerns him is what happens when users treat these products in the same way they would a sportsbook, while the market grows faster than the safeguards around it.
He’s taken those concerns directly to federal regulators. In a joint submission with Elie Mishory — former Chief Regulatory Officer and General Counsel of Kalshi and former Acting Associate Director of the CFTC’s Division of Market Oversight — Russell responded to the CFTC’s Advance Notice of Proposed Rulemaking on prediction markets.
They argued that oversight needs to account for manipulation risk, insider trading, cross-market coordination, and the limits of exchange-level surveillance.
For Russell, those concerns aren’t theoretical. That’s because his career has taken him through markets at very different stages of maturity, including places where oversight was still taking shape.
“Going into new markets where [regulated sports betting] was fairly new, Africa being the prime example, yeah, you do learn very quickly about what needs to be done in terms of governance in order for your product to remain viable,” Russell explained.
In markets built around real-world outcomes, those controls need to be built in from the start. Without them, the same features that make a market attractive can also make it easier to exploit.
“If you don’t have controls against match fixing, if you don’t have controls against insider trading, if you don’t have controls against people being able to affect outcomes, then human nature is going to take over,” he said. “People are going to use what they can to benefit financially from the information they’ve got, sometimes legitimately, sometimes not legitimately.”
It’s that lesson that Russell believes should be front and center as prediction markets continue to expand.
“You need to make sure those guardrails are there,” Russell said, “because if they aren’t, the outcomes are not good.”
He can also see the upside to prediction markets, including the possibility for individuals and businesses to use them for hedging, planning, and managing exposure to real-world events. And that upside is why the governance piece matters.
“That’s why I’m fascinated by it, because I can see the route, I can see the commonality, I can see the potential, but ultimately as well, I can see the massive downfalls if the governance isn’t there,” Russell said.
That may be the clearest through line in Russell’s argument. The courts may decide who has authority over prediction markets. But the need for guardrails won’t wait for the courts.
As the U.S. builds a market that can attract sports bettors, retail traders, insiders, and hedgers, classification can only answer so much. The harder question is whether the rules are ready for a product that refuses to stay in one box.
In Russell’s words, “The need exists regardless of who wins.”
