Prediction markets need data-backed guardrails, AIBM’s Cohen

Jonathan Cohen, a senior official at the Alliance for Integrity in Betting and Markets, urged data-backed guardrails for prediction markets to protect users. He proposed age-based access limits, default spending caps for younger users and real-time monitoring of trading to detect harm.

Cohen stated AIBM’s aim is “preventing gambling and gambling-like activities from negatively affecting the well-being of users, specifically boys and men.” He described two types of data regulators and platforms should share: back-end platform data such as the role of market makers and the share of trading by institutional versus retail users, and consumer behavior data including player spending by age and how users enter trouble.

He recommended setting a minimum account age of 21 for prediction markets and default limits for users under 25, citing similar rules in the U.K. and Ireland. Cohen called for automated checks to detect loss-chasing and rapid increases in deposits or bet sizes, and for platforms to intervene when those patterns appear.

He asked, “If you can’t rent a car, why should you be able to lose its value overnight betting on table tennis?” and urged platforms to build speed bumps that flag escalating account activity.

Cohen highlighted risks that differ from traditional sportsbooks, including the blurring of gambling and investing when prediction markets are offered inside brokerage apps. He questioned claims that some markets are purely peer-to-peer, noting market makers and institutions often supply a large portion of liquidity and saying, “Insisting these are peer-to-peer when we know that there is an aspect that is not… if it’s not true, then show me.”

Conversations with regulators and lawmakers began after Cohen joined AIBM several months ago. He outlined two parallel regulatory threads: reassessing sports-betting rules enacted since 2018 and an education effort for lawmakers unfamiliar with prediction markets. He called bans such as prohibiting credit card deposits largely symbolic and said Congress is most likely to focus on insider-trading and national-security-related markets if it takes action.

Cohen pointed to recent high-profile bets tied to geopolitical events as drivers of public concern and cited polls showing a substantial share of Americans view sports as rigged. AIBM treats gambling as a public-health issue and says transparent platform data and behavioral research are needed so policies address specific risks rather than broad or cosmetic limits.

He added that regulation and public awareness will take time and compared policy development to other sectors where rules emerged over years. Cohen urged that any guardrails be grounded in empirical data on user behavior and platform mechanics rather than ad hoc measures.