Circa Sports Owner Derek Stevens Rips Prediction Markets, Calls Kalshi and Polymarket ‘Pirates’ and ‘Thieves’

Circa Sports owner Derek Stevens didn’t hold back this week when discussing prediction markets, calling operators like Kalshi and Polymarket “pirates” and “thieves” in comments published Tuesday. Stevens argued that the rapidly growing prediction market industry has an unfair edge over licensed sportsbooks because it avoids the tax and fee structure regulated operators are required to pay.

“They’re pirates. They’re thieves,” Stevens said. “We’d be able to offer -102 splits either way as well if we didn’t have all the fees to pay. I tend to believe that more balanced heads are going to prevail.”

The Fee Argument at the Center of the Fight

Stevens’ central complaint is financial. Licensed sportsbooks like Circa pay a federal sports-betting excise tax, state gaming taxes, league data fees, and contributions to problem-gambling funds. Prediction market platforms, which classify their offerings as financial derivatives rather than sports wagers, have so far avoided most of those obligations.

“We’re paying all those fees,” Stevens said. “They don’t. Effectively, they’re thieves.” He pointed to Illinois as a specific example, noting the state charges a 25-cent fee on every wager placed through a licensed sportsbook. “Just because Kalshi and Polymarket are avoiding those fees, does that make them better? I think no. It’s preposterous.”

Stevens believes the current disparity gives prediction markets room to offer tighter pricing than traditional books can match — a structural advantage that has already started pulling handle away from operators like Circa, which runs what Stevens describes as a low-hold model built around competitive odds rather than heavy vig.

A Legal Battle With No Clear End in Sight

The comments come as prediction markets face mounting legal pressure across the country. New York Attorney General Letitia James recently sued Kalshi for at least $36 billion, accusing the platform of running an unlicensed gambling operation in violation of the state’s constitution and gaming laws. The Commodity Futures Trading Commission has pushed back forcefully, arguing it holds exclusive federal jurisdiction over event contracts and asking courts to block New York’s enforcement effort entirely.

Most industry observers expect the U.S. Supreme Court will ultimately have to settle the jurisdictional question. Stevens isn’t convinced New York backs down easily, though. “I don’t see the state of New York backing down and saying, ‘Oh, just because you guys are shrewd, we’re going to take a billion-dollar hit on our state revenue,'” he said.

It’s not the first time Stevens has used sharp language to describe prediction markets. Earlier this year, on a Bloomberg podcast ahead of Super Bowl 60, he compared the platforms to “marauders” and used the analogy of hijacked big-screen TVs being sold off a truck at a discount — an image he repeated in this week’s comments. Despite the rhetoric, Stevens acknowledged Circa “competes pretty well” against the newer platforms, even while conceding they’ve cut into his sportsbook’s business.

Circa Keeps Expanding Regardless

The prediction market fight hasn’t slowed Circa’s growth plans. The sportsbook recently secured approval to operate in Arizona, with Stevens targeting a January 2027 launch — online-only at first, though he left open the possibility of adding a retail sportsbook down the line, potentially through a partnership he declined to detail further. Circa currently operates in Nevada, Colorado, Kentucky, Iowa, and Illinois, with both retail and online wagering available in each of those states.

As Circa expands its own footprint, bettors comparing regulated sportsbook promo codes and licensed platforms will likely keep hearing this debate resurface, especially as the Kalshi and New York litigation moves toward a resolution that could reshape how prediction markets operate nationwide.

Why the Distinction Matters to Bettors

For everyday bettors, the fight isn’t purely academic. Licensed sportsbooks operate under state oversight that includes consumer protections, responsible gambling requirements, and dispute resolution processes bettors can lean on if something goes wrong. Prediction markets, regulated instead as financial exchanges by the CFTC, don’t carry the same state-level consumer safeguards, even though the end product — betting on the outcome of a game — looks nearly identical to the average user.

That regulatory gray area is exactly what’s fueling pushback from operators like Circa and from state attorneys general. If prediction markets are ultimately classified as gambling products subject to state law, platforms like Kalshi and Polymarket could be forced to pull back from states like New York entirely or restructure how they operate nationwide. If federal jurisdiction wins out instead, sportsbooks could see continued pressure to compete against a rival fee structure they say gives prediction markets an artificial pricing edge.

Either outcome would have ripple effects well beyond Circa. Every regulated sportsbook odds product currently factors in the tax and licensing costs Stevens referenced, and a prolonged stalemate leaves both bettors and operators uncertain about which rules will ultimately govern the fastest-growing corner of the industry.