The ad break that made me check my own assumptions
I was watching a UFC numbered card on a regulated-state feed in late November 2025 when I noticed the same Kalshi pre-roll three times in the first hour. Same creative, same call-to-action, no responsible-gaming line at the end of the spot. Twenty minutes later a FanDuel spot ran with a full RG tag at the bottom of the screen, problem-gambling helpline number, the standard regulated-operator format. The contrast was sharp enough that I went looking for the underlying impression data, and what I found was a 2025 advertising landscape that had bent in a direction I hadn’t quite expected.
The headline isn’t that sports betting advertising has grown — that’s been true every year since 2018. The headline is that prediction markets, which weren’t a meaningful US ad-spend category until 2024, overtook regulated sportsbooks in the digital impression rankings in 2025. And they did it while operating outside the responsible-gaming messaging framework that licensed operators are required to follow. That’s the gap this piece is about, and it matters in California more than almost anywhere else because California’s residents see this advertising while having no legal regulated-sportsbook product to compare it against.
See also: UFC’s $314M sponsorship revenue and industry growth.
The headline numbers and what they tell you
Two figures from 2025 advertising data frame the whole conversation. In 2025, Kalshi became the third-largest sports-betting advertiser in the US by digital impressions, accumulating 5.2 billion impressions across digital channels — ahead of FanDuel at 2.9 billion. That ranking is significant on its own; it gets more significant when you consider that Kalshi reached that volume in roughly eighteen months of meaningful US sports-betting advertising, while FanDuel has been spending in the category since 2018. The second figure is harder to look past: forty-three percent of US sports-betting digital ad impressions in 2025 failed to meet responsible-gaming messaging compliance standards — and most of that non-compliance was concentrated in prediction-market advertising.
The forty-three-percent figure was reported by the American Gaming Association alongside its March Madness wagering estimate. The methodology measures whether digital sports-betting impressions carried the responsible-gaming language that state-licensed operators are typically required to include in their advertising under each state’s licensing framework. That language varies by state but generally includes a problem-gambling helpline reference, an age restriction reminder, and limits on framing that could be read as a guaranteed-win or guaranteed-return claim. Licensed sportsbooks build that compliance into their creative as a routine matter. Prediction markets, regulated federally by the CFTC rather than state-by-state, operate under a different framework that does not require equivalent messaging.
What this means in practice for a viewer is that a meaningful share of the sports-betting-adjacent advertising they see in 2025 carries no RG disclosure. The viewer experience is the same either way — same creative density, same call-to-action energy — but the underlying regulatory frame differs in ways the impression itself does not surface.
Why a federally-regulated event-contract platform can saturate
Kalshi’s ability to outspend FanDuel on digital impressions in 2025 isn’t a story about deeper pockets. It’s a story about a different regulatory regime that creates different cost structures. State-licensed sportsbooks face per-state taxation on their gross gaming revenue at rates that range from roughly six percent to over fifty percent depending on the jurisdiction, plus state-specific advertising rules that constrain channel selection and creative format. Their unit economics force advertising discipline.
Kalshi, operating as a CFTC-regulated derivatives exchange offering event contracts, doesn’t face state-by-state taxation on its trading volume. Its tax exposure is structured around federal categories and at materially lower effective rates for the equivalent volume of consumer activity. That cost differential frees up incremental advertising budget that a state-licensed sportsbook simply can’t match on a per-dollar-of-revenue basis. Add in the absence of state-by-state RG-compliance overhead on the creative production side, and you get a platform that can run more impressions, in more formats, in more states, with less compliance friction.
There’s also a coverage advantage. Kalshi operates in all fifty states because federal CFTC regulation pre-empts state-level prohibitions on sports betting for instruments classified as event contracts — a position that has been contested by several state regulators including California’s, but which has held up in the federal courts through 2025 in the cases brought so far. State-licensed sportsbooks can only advertise to consumers in states where they hold a licence, which structurally caps their addressable digital-impression universe. Kalshi’s addressable universe is the whole country. That alone explains a meaningful share of the impression-ranking gap.
The Sports Betting Alliance lobbyist Jeremy Kudon framed the broader concern in a public statement, where Marc Edelman quoted him saying The only way to stop them is for the state attorney general or the gaming agencies to act
about the difficulty of constraining Kalshi-style platforms — though I’d note that view comes from the licensed-operator side of the dispute and represents that side’s frame, not a settled regulatory consensus.
What the RG-messaging mandate actually requires
The forty-three-percent non-compliance figure makes more sense once you understand what compliance looks like. State sports-betting licensing frameworks typically require RG messaging on multiple dimensions: a problem-gambling helpline phone number visible in any advertisement, age-restriction language, prohibition on advertising to college students or in proximity to college campuses for in-state operators, restrictions on framing the product as a financial investment or a way to guarantee returns, and disclosure of the operator’s licensed status with a regulator reference.
The American Gaming Association’s voluntary Responsible Marketing Code for Sports Wagering adds a further layer that most major US licensed operators have signed up to, which covers tone of advertising, depiction of consumption, and avoidance of certain framings around winning streaks or social-status implications of betting. That code doesn’t have legal force on its own but has become a de facto industry baseline.
Prediction markets sit outside both layers. The CFTC’s regulatory framework for derivatives doesn’t require equivalent RG messaging because the products are classified as financial instruments rather than gambling. Kalshi’s advertising therefore doesn’t have to carry the same helpline number, the same age-warning, or the same problem-gambling resource reference that a FanDuel spot routinely includes. That’s not a loophole in the colloquial sense — it’s a different regulatory frame producing different content requirements — but the practical effect on the viewer’s information environment is the same as a loophole would be.
This is also where the Anna Sainsbury frame matters. Veteran integrity figures in the gambling industry have argued for years that the regulatory gap between federally-cleared event contracts and state-licensed sportsbooks creates an uneven playing field for consumers. As one regulator-side voice put it, I bet on sports all the time. I never use my name when I do
— a remark that points at the broader reality that even regulated US sports betting has its grey margins, and prediction markets just made those margins larger.
What it looks like from California
California is where the messaging gap matters most, and the reason is structural. The state has no legal sports betting framework, so a Californian seeing an ad for any sports-betting product in 2025 cannot legally fulfil the implied call-to-action on a state-licensed product. Licensed sportsbooks, knowing this, geo-filter most of their digital advertising away from California IP addresses. Their per-impression spend in the state is meaningfully lower than in regulated-state markets like New Jersey or Pennsylvania.
Kalshi has no equivalent restriction. Its product is, in its own legal framing, available to California residents because the federal CFTC classification supersedes the state-level sports-betting prohibition. So a Californian’s 2025 advertising experience is asymmetrically weighted toward prediction-market impressions and away from licensed-sportsbook impressions. That asymmetry compounds the RG-messaging gap from the previous section — Californians see proportionally more of the non-RG-compliant impression universe than residents of regulated states do.
That’s a problem for anyone who reads sports-betting advertising as a normalisation signal. The advertising volume is rising. The product implied by the advertising is partly accessible. The RG framework that exists in regulated states to soften the normalisation effect is partly missing. For more on how this interacts with the broader California legal landscape — and the offshore-versus-prediction-market split that’s been forming in 2025 — I covered the underlying dynamics in the work on prediction markets versus sportsbooks in UFC betting.
See also: how to bet on ufc in california — ad saturation.
How regulators are likely to respond
The 2025 numbers will produce a regulatory response in 2026; that much is predictable. What’s less predictable is the form. State attorneys general in roughly a dozen states have already issued cease-and-desist letters to Kalshi over sports event contracts; California’s Bureau of Gambling Control was among the earliest. Those state-level actions have not produced consistent outcomes in court, but they’ve raised the compliance overhead for prediction-market platforms operating in those states.
The federal layer is where the bigger move would come. The CFTC could revise its position on sports event contracts under its general authority over derivatives markets, or Congress could amend the Commodity Exchange Act to explicitly exclude sporting events from the event-contract category. Neither move is imminent at the time of writing, but both are on the table in policy discussions running through 2026. The AGA has been actively lobbying for the second of those moves; the prediction-market industry has been lobbying against it.
The narrower regulatory route is RG-messaging parity. If the CFTC or Congress required event-contract platforms to carry equivalent RG language to state-licensed sportsbooks, the impression-volume gap wouldn’t shrink, but the messaging gap would. That’s the lowest-friction path I’d watch for in 2026, and the one that would do most for the consumer experience without resolving the underlying jurisdictional dispute.
