Core Insights - The rise of prediction markets is impacting the sports-betting sector, with consumers increasingly using platforms like Kalshi, Polymarket, and Robinhood for wagering on various outcomes, including sports, entertainment, and politics [1] - Roundhill Investments has filed for six politically focused prediction-market ETFs, which could further influence the sector [1] Group 1: Roundhill's Prediction Market ETFs - The proposed ETFs will focus on political outcomes related to the 2026 and 2028 elections, allowing investors to speculate on and profit from election results [3] - The Democratic President ETF aims for capital appreciation if a Democrat wins the 2028 presidential election, with similar conditions for the Republican version and funds tied to the 2026 elections [3] - The ETFs will invest in event contracts regulated under the Commodity Exchange Act and overseen by the CFTC, with no specific exchange mentioned for the contracts [4] Group 2: ETF Functionality and Market Dynamics - The ETFs will not terminate if they lose money based on election outcomes; instead, they will shift focus to the next election cycle, and funds that correctly predict outcomes will undergo a reverse stock split [4] - Roundhill's CEO noted that sportsbooks are not being displaced by prediction markets, which offer simplicity and different pricing mechanics [6] - The pace of convergence in this market will depend on regulation, but innovative disruption indicates the longevity of sports betting and gambling markets [7]