Family-owned and local businesses are the lifeblood of America, contributing trillions of dollars to the economy and standing as proud symbols of our national heritage. The health of Main Street is tied to the financial well-being of communities nationwide.
Unfortunately, a new threat has emerged that is sucking money out of the country’s pockets and diverting spending away from small businesses.
Prediction markets, which present themselves to regulators and the public as legitimate forms of investing, are actually nothing more than thinly veiled gambling sites. These platforms say they allow users to trade on anything, such as what the president will say at his next public appearance, the weather tomorrow, and whether the United States will confirm the existence of aliens. In reality, the overwhelming majority of volume on these platforms is nothing more than sports betting.
As prediction markets normalize sports betting, Americans are pouring billions of dollars into them, and potentially redirecting household spending away from family-owned and local businesses and into speculative wagering platforms.
Unlike licensed online sports betting, which is available only in states that have decided to legalize the practice on their terms, prediction markets have put a casino into the pocket of every adult anywhere in the country. Prediction markets don’t abide by state bans on online sports betting, 21-plus age minimums, or state gambling tax programs that support reinvestment in communities.
Not only has the federal government done nothing to rein in prediction markets, but the Commodity Futures Trading Commission is, in fact, suing states that are trying to stop prediction markets in their jurisdictions. CFTC Chairman Mike Selig has aggressively championed prediction markets, even as President Donald Trump expresses concern.
“The whole world, unfortunately, has become somewhat of a casino,” Trump recently said. “I don’t like it, conceptually, but it is what it is. No, I think that I’m not happy with any of this.”
At the Family Business Coalition, we champion America’s family businesses, mom-and-pop shops. We work to protect these diverse establishments and advance their interests nationwide. That’s why we’re speaking up on prediction markets, and why we joined Gambling is Not Investing, a coalition committed to reining in these platforms and stopping them from hooking Americans on unregulated sports betting. It’s time for the Commodity Futures Trading Commission to acknowledge that it does not have the expertise or the authority to regulate online sports betting.
Every dollar spent on these platforms is a dollar exported out of our communities and away from real America. With so much money flowing into prediction markets, it could lead to household spending shifting away from something far more important: supporting family-owned and local businesses, America’s main economic engine.
Americans do support them now, in droves. In fact, research shows that America’s family-owned businesses account for 83.3 million jobs, or 59% of the country’s private workforce.
More than 32 million family businesses nationwide generate $7.7 trillion in gross domestic product and play vital roles throughout the economy. Studies have shown that 35% of Fortune 500 companies are family-controlled, representing the full spectrum of American companies, including small businesses and major corporations.
Perhaps most vital of all is the underlying spirit that drives the people at family businesses to come to work every day. Since they feel a special connection to their establishments, family businesses “retain talent better than their competitors do” — only 9% of family business workforces turn over annually, less than non-family firms, and they tend to avoid layoffs during economic downturns.
More broadly, local businesses are an essential part of the U.S. economy, generating unique loyalty from consumers. In 2024, American shoppers spent $3.7 trillion at local stores, or 51.3% of all retail sales.
Americans go out of their way to keep their spending local: Eighty percent of people shop locally to support their community, while nearly all consumers report going online to find local businesses.
Those hard-earned dollars need to stay in the pockets of deserving owners of family and local businesses, and away from the overflowing and illicit coffers of prediction markets.
Palmer Schoening is the chairman of the Family Business Coalition. He wrote this for InsideSources.com.
