John Arnold, founder and co-chairman of Arnold Ventures, speaks during S&P Global’s CERAWeek session at the George R. Brown Convention Center in Houston on March 20, 2024.
Lee Yi-Ching | Houston Chronicle | Hearst Newspapers | Getty Images
Billionaire philanthropist John Arnold says online sports betting has changed immeasurably since it became legal in the United States in 2018, thanks to online prediction market platforms Calsi and Polymarket and the rise of mobile apps. draft kings And FanDuel. To better understand the potential risks, he is awarding $2.6 million to researchers studying the evolving world of gambling in sports.
The previously unreported grant will go to researchers at universities and think tanks to investigate the effects of gambling on economic well-being, household composition, mental health and consumer behavior.
Arnold, who co-founded Arnold Ventures with his wife Laura, told CNBC he wants lawmakers and regulators to wake up to the new reality of the burgeoning sports betting market.
“Being able to bet on the phone has dramatically increased access and reduced friction,” Arnold told CNBC. “The product has changed. You can bet on any pitch. You can bet at a speed that was never possible back in the days when you had to make a phone call to place a bet.”
Arnold, a former hedge fund owner and Enron energy trader whose philanthropy has focused on criminal justice reform and improving higher education, has recently turned his attention to the potential pitfalls of prediction markets and sports betting apps, meeting with lawmakers to push for stronger guardrails.
Schools including Princeton University, the University of Pennsylvania and the University of Wisconsin will receive Arnold grants for research over the next three years, Arnold Ventures said in a press release.
A Supreme Court ruling in 2018 paved the way for sports betting to be legalized in the United States, and participation has increased every year since. An April study by Siena College Research Institute found that 27% of Americans have an active online sports betting account, up from 19% in 2024.
The American Gaming Association announced earlier this year that the sports betting industry’s revenue in 2025 will reach a record $16.96 billion. Additionally, trading volume in the top two prediction markets, Calci and Polymarket, rose from less than $5 billion in September to about $24 billion in April, according to a Pew Research Center analysis.
Sports is the most popular type of event contract on a volume basis in prediction markets, and is operated distinctly and is subject to different regulatory authorities than traditional gambling sites. As of February, about 87% of bets on Calci last year were on sports, according to the Congressional Research Service.
Since 2018, 39 states, including the District of Columbia, have legalized sports betting.
“A lot of states jumped on board to legalize sports betting in 2018, and I think the potential tax revenue was very appealing,” Arnold said. “For the Legislature, the ability to get funding from voluntary taxes rather than mandatory taxes is very attractive.”
“Our contention, however, is that both the intensity and access of not just sports betting, but many other nefarious activities, have changed dramatically.” “As lawmakers think about what to do with this, whether to legalize it, they need to recognize that this product has changed.”
Arnold likens the maturation of online sports betting to the legalization of marijuana and the evolution of pornography.
“Today’s marijuana is very different from the product of a generation ago. It’s just much stronger and more accessible,” Arnold said. “Think about pornography: The intensity of the product has increased dramatically, and the ease of access has eased dramatically.
“Access to sports betting has obviously increased dramatically, but the product has changed as well.”
Arnold Ventures funded a research grant in 2025 to study the effects of legalized marijuana.
The access and intensity of sports betting has also increased. Certain users can place multiple bets on a single game without leaving their couch. A Siena study this spring found that 46% of men between the ages of 18 and 49 bet, which critics argue could have negative financial implications for young men.
The issue has attracted the attention of lawmakers on Capitol Hill, with a flurry of proposals filed since the beginning of the year.
Some bills, like one introduced by Sen. Jeff Merkley, R-Ore., and Rep. Jamie Raskin, D-Maryland, would ban prediction market event contracts for sports, elections, wars, and government actions. Another, Sens. John Curtis (R-Utah) and Adam Schiff (D-Calif.), among others, want to ban prediction markets like Calci and Polymarket from offering sports betting on their platforms.
Meanwhile, a bill by Sen. Richard Blumenthal (D-Conn.) and Rep. Paul Tonko (N.Y.) seeks to create stronger guardrails for online sports betting by giving states the power to enact their own laws, limit advertising and ban certain types of prop bets, which bet on specific events or statistics within a game rather than the final outcome.
Arnold has met with lawmakers on Capitol Hill about the issue, but most of his efforts are directed at the state level, where sports betting is regulated. Prediction markets feature peer-to-peer contracts, as opposed to betting against the house, and are federally regulated by the Commodity Futures Trading Commission.
“We’re very actively talking with state legislators about the legalization decision because legalization bills pass through state legislatures every year,” Arnold said. “And some are already legalizing it and thinking about proper guardrails.”
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
