Life in the gray: why gambling innovation stems from unregulated areas

Prediction markets are the latest in a long line of examples of how gambling innovation takes root in the gray areas.

Major prediction markets are embroiled in lawsuits across the country, with some states like Arizona banning some operators altogether. State governments argue that the services are sidestepping necessary gambling licensing laws, while prediction markets maintain they shouldn’t be subject to state-level regulation.

While there are some ways that prediction markets mimic traditional gambling...