Sport and prediction markets betting

The worldwide tokenization market measurement reached roughly $1.24 trillion in 2025, a big improve from $865.54 billion in 2024, with projections for multi-trillion-dollar development by the tip of the last decade. This development was primarily pushed by regulatory readability in key jurisdictions. That is Half 4 of a four-part sequence the place I consider how tokenized edge cloud streaming and AI are reworking sports activities and prediction markets betting, which is a quickly creating immersive expertise. Half One: 2025 was the yr of tokenization. Half Two focuses on power necessities to help the expansion in AI-driven tokenization, necessitating orbital cloud knowledge facilities. Half Three is about tokenization and AI expertise developments in Hollywood and the movie business throughout 2025. 

How tokenized edge cloud streaming and AI are reworking immersive sports activities and prediction markets betting

Throughout 2025, the fast growth of the U.S. sports activities betting market has created a fancy panorama of state-specific laws. Whereas 31 states and D.C. now supply cellular entry, these within the 11 prohibited states should stay conscious of native authorized boundaries. 

Lurking within the shadows of this growth is what the FBI Director Kash Patel referred to as “mind-boggling” sports activities betting and sports activities rigging schemes of historic proportions that the FBI  unveiled in back-to-back operations throughout 2025 that had been a part of multi-year investigations. Consequently, 2025 has been extensively characterised as a “turning level” for the U.S. sports activities betting business because of a succession of great and high-profile playing scandals that uncovered main vulnerabilities throughout skilled and faculty sports activities. The sheer quantity and severity of incidents throughout a number of skilled and collegiate leagues led FBI Director Kash Patel to liken the unlawful sports activities betting to insider buying and selling, the place the sportsbooks themselves had been thought-about victims on this widespread fraud.

The FBI combats unlawful playing, which is estimated to be a $673.6 billion annual downside, primarily by means of the enforcement of prison statutes, coordination with state and worldwide companions, and a devoted program to guard sports activities integrity which have “important penalties” for the general public, the financial system, and the integrity of sports activities betting within the U.S  based on a warning on the IC3  web site. 

Seventy % of People assume that the proliferation of streaming based mostly sports activities betting is damaging the integrity of video games with video games being rigged by gamers to regulate the betting odds, generally known as match-fixing, spot-fixing, or point-shaving typically involving gamers, officers, or coaches colluding with gamblers to predetermine particular outcomes or occasions inside a sport for monetary achieve that are types of competitors manipulation in sports activities which might be unlawful in lots of jurisdictions based on a brand new NBC Information Choice Desk Ballot, powered by SurveyMonkey. 

How AI and cloud edge streaming tech are utilized in sports activities betting

Regardless of match-fixing, spot-fixing, and point-shaving, the intersection of authorized cellular wagering, superior edge cloud infrastructure, and AI has revolutionized the sports activities business, reworking it right into a extremely interactive and data-driven digital financial system. The main focus has shifted from passive viewing to lively participation, pushed by customized experiences and real-time knowledge evaluation. 

The business’s shift to on-line streaming platforms was initially pushed by sports activities leagues, whether or not it’s the NBA, MLB, or NFL, in search of to have interaction youthful audiences and offset falling TV scores. On-line platforms like Amazon, ESPN+, and Apple TV+ host main video games, boosting engagement that enables leagues to distribute content material on to followers (direct-to-consumer fashions), providing extra management over the published expertise, knowledge assortment, and content material distribution globally utilizing AI and edge cloud streaming applied sciences. 

These applied sciences revolutionized sports activities betting by enabling real-time, in-play wagering by means of low-latency feeds and cellular apps, creating immersive experiences with micro-bets on small sport moments (like the following pitch), fostering deeper fan engagement by way of interactive stats and knowledge, and integrating betting straight into content material, turning passive viewers into lively members throughout any machine, anyplace. This shift from broadcast to interactive platforms retains followers captivated, extends betting home windows, and drives new income streams for leagues and operators. 

Opinion: Hollywood Selva

How main sports activities betting operators are launching crypto-integrated prediction markets

The 2025 panorama for U.S. prediction markets expanded quickly by leveraging federal oversight from the Commodity Futures Buying and selling Fee (CFTC) to function in all 50 states, together with these 11 states the place conventional sports activities betting is unlawful. This method allowed platforms like Kalshi, DraftKings, and FanDuel to faucet into new markets and reportedly generate important buying and selling volumes by converging sports activities wagering with monetary betting utilizing AI, edge cloud streaming, and digital property to supply enhanced person choices and important income potential.

In a significant shift, Kalshi the primary federally regulated prediction market change the place customers should buy and promote contracts based mostly on the end result of future occasions, akin to sports activities, politics, and financial indicators in partnership with Coinbase and Robinhood started providing occasion contracts on sports activities (e.g., March Insanity, NFL, Chicago Blackhawks), enabling customers in all 50 states to position wagers on video games as federally overseen monetary derivatives, even in states the place conventional sports activities betting stays unlawful like California and Texas. Kalshi not too long ago built-in with the world’s largest crypto change, Binance-backed BNB Sensible Chain (BSC), permitting customers to deposit and withdraw native BNB and main stablecoins — Tether (USDT) and USDC (USDC) — straight on the chain for prediction market buying and selling, enabling sooner, extra direct crypto transactions with no need complicated cross-chain bridges or fiat conversions.

In October 2025, Trump Media & Know-how Group (TMTG), the mother or father firm of his social media platform Reality Social, introduced that it could launch its personal prediction market, referred to as “Reality Predict,” in partnership with Crypto.com. This platform will enable customers to commerce contracts on a variety of occasions, together with political elections, rates of interest, and sports activities.

In November 2025, the Chicago Board of Alternate (CBOE) International Markets, the world’s largest choices change, introduced that it plans to launch its personal prediction markets and can explicitly give attention to contracts tied to monetary and financial occasions, avoiding sports-related merchandise because of regulatory dangers. And Polymarket, the world’s largest blockchain-based prediction market, with companions akin to Yahoo Finance, TKO Group Holdings (UFC and Zuffa Boxing), X, CNN, and CNBC, introduced a multi-year partnership with PrizePicks, a number one sports activities leisure and every day fantasy sports activities operator, to facilitate a brand new federally regulated predictions market providing.

In December 2025, main sports activities betting operators Fanatics, DraftKings, and FanDuel all launched federally-regulated prediction market platforms, many in partnership with the Chicago Mercantile Alternate (CME), which is the world’s largest and most various derivatives market for futures and choices, dealing with large volumes throughout rates of interest, equities, FX, power, and agriculture to entry a nationwide buyer base in states the place conventional sports activities betting stays unlawful.

Nonetheless, this fast growth can be inflicting viewers fragmentation, technical difficulties, and potential exclusion of older followers. It has triggered important authorized challenges and a fierce debate with state-level gaming regulators. 

Particular person taxation within the new tokenized streaming wagering financial system

In 2025, the shift in sports activities betting and prediction markets to a direct-to-consumer (DTC) mannequin by way of tokenized streaming with edge AI has created a fancy and unsure worldwide tax panorama, primarily pushed by the proliferation of Digital Providers Taxes (DSTs) and the stalled multilateral tax negotiations. 

Trump’s 2025 “One Large Stunning Invoice Act” launched important modifications to how bettors/gamblers are taxed, sparking debate over whether or not the legislation inadvertently punishes authorized bettors, producing important criticism from the gaming business and lawmakers. 

“Phantom revenue” tax: Beginning January 1, 2026, gamblers will solely be capable of deduct 90% of their losses in opposition to their winnings. This implies a bettor who breaks even (e.g., wins $10,000 and loses $10,000) would nonetheless be taxed on a $1,000 “phantom revenue.” Wagering with cryptocurrency includes particular dangers and tax obligations within the U.S. as a result of risky nature of digital property and their classification by the IRS as property established in IRS Discover 2014-21. Transactions can set off two sorts of taxable occasions: bizarre revenue from the playing winnings and capital positive aspects or losses when the crypto is disposed of. 

Wagering/disposal of property: When a gambler makes use of digital property to position a wager, the IRS considers this a disposal or sale of the digital asset in change for a service (the wager). A capital achieve or loss is realized based mostly on the distinction between the honest market worth (FMV) of the digital asset on the time of the wager and the gambler’s authentic value foundation. Quick-term (held one yr or much less) positive aspects are taxed at bizarre revenue charges (as much as 37%). Lengthy-term (held multiple yr) positive aspects profit from preferential capital positive aspects charges (0%, 15%, or 20%). Capital transactions are primarily reported on Kind 8949 and Schedule D (Kind 1040).

Receiving winnings: Winnings obtained in digital property by a gambler are thought-about taxable bizarre revenue. The quantity of revenue is the FMV of the digital property on the precise second the gambler wins them. This revenue needs to be reported on Schedule 1 (Kind 1040) or Schedule C if the gambler is an expert gambler.

Holding/promoting winnings: If the worth of the digital asset the gambler received appreciates (or depreciates) after he/she receives it and the gambler later sells, exchanges, or makes use of it for one thing else, this triggers a second taxable occasion: a capital achieve or loss. The fee foundation for these received property is the FMV gambler reported as revenue when he/she initially obtained them. 

Taxpayers should keep detailed information of all digital asset-based wagering transactions, together with dates and honest market values, and reply the digital asset query and should report all revenue from taxable digital asset transactions on their federal revenue tax return, no matter whether or not they obtained a payee assertion like the brand new Kind 1099-DA from the betting platform.