Sports betting is no more addictive than stock trading, and financial brokers should face similar obligations to protect vulnerable customers, Smarkets CEO Jason Trost told Benzinga in an exclusive interview.
“I don’t think sports betting is any more addictive than any other form of financial trading,” said Trost, who has spent nearly two decades running a British betting exchange.
His comments come amid a legal battle over whether sports contracts offered by prediction markets such as Kalshi should fall under federal financial regulation or state gambling laws.
Why Trost Rejects the Gambling Distinction
“The debate always centers around is it gambling or is it investing? And my argument is it’s both,” Trost said.
He argues that gambling and investing can involve similar financial transactions, with the distinction often coming down to why someone places a trade.
“We kind of put sports betting in the naughty bin and financial trading in the good bin, but they’re the same thing and we need to regulate it as the same thing,” he said.
Trost isn’t calling for weaker protections for problem gamblers. Instead, he believes financial trading should face comparable safeguards.
He pointed to Six Flags Entertainment (NYSE:FUN), whose shares plunged following a fatal roller-coaster accident, and imagined someone with little money borrowing $1,000 from his brother to speculate on the stock.
Should brokers assess whether such customers can afford the risk or might be addicted to trading?
“I think the answer is yes, but I don’t think society is ready to say yes to that,” Trost said.
What Does the Research Say?
Research has identified similarities between problem gambling and speculative financial trading, including chasing losses, impulsiveness and excessive risk-taking.
A 2025 review in Frontiers in Psychiatry examined 23 papers on problematic trading. Researchers cautioned against automatically classifying it as gambling disorder, arguing that trading may have distinct characteristics requiring further study.
Uttara Ananthakrishnan, a University of Washington researcher, previously told Benzinga that “a lot of people think about sports gambling as an investment.”
She warned that financial regulators must be equipped to address gambling addiction, questioning whether the CFTC currently has the necessary expertise.
“If the CFTC is not equipped to do that, then what’s the point of regulating it?” she asked.
The Fight Over Gambling Regulation
A federal appeals court ruled in September that Ohio and Tennessee could apply their gambling laws to Kalshi’s sports contracts. Kalshi requested a rehearing on Oct. 9.
Trost disagrees with the states’ position, arguing that federal financial regulation should take precedence.
Former CFTC general counsel Daniel Davis told Benzinga that the dispute has a “very good chance” of reaching the Supreme Court.
The dispute has implications for Robinhood Markets (NASDAQ:HOOD), which offers Kalshi sports contracts, and DraftKings (NASDAQ:DKNG), which operates both a traditional sportsbook and a federally regulated prediction-market exchange.
Trost acknowledged that finding the right level of protection is difficult. He believes British gambling rules go too far, but American financial trading could face stronger safeguards.
“I don’t know what the sweet spot is,” he said.
Image: Shutterstock
Kalshi and Benzinga have an existing data collaboration agreement.
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