Advocacy group claims Americans view sports prediction markets as gambling

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The Backstory

Why the prediction markets fight intensified

Public opinion is hardening against treating sports event contracts as finance, not betting. In one recent survey, most respondents said sports prediction contracts should be regulated like other wagers and overseen by state and tribal gaming regulators rather than federal derivatives officials. The view echoes findings from earlier polling that Americans recognize these products as gambling and want the same consumer safeguards applied across the board, including age checks and tax obligations.

That sentiment has collided with a fast-growing market built on federal oversight. Platforms structured under the Commodity Exchange Act argue they can list event contracts nationwide because the Commodity Futures Trading Commission regulates their venues. The resulting clash — between state gambling regulators and federally supervised exchanges — has produced legal battles, a new industry lobbying front and a bipartisan push in Congress to curb sports markets.

Polling shapes a policy flashpoint

Research this winter and summer signaled how voters might guide lawmakers. A nationwide YouGov survey commissioned by the American Gaming Association found that a large share of Americans view sports event contracts as gambling and want them regulated like state-licensed sports betting. The group summarized the findings in an analysis underscoring broad support for state authority, including that roughly 80% of respondents favored sportsbook-style oversight and availability limited to states where such wagering is legal.

Earlier, Ipsos polling pointed in the same direction for younger users, a core growth audience for prediction platforms. According to reporting on the Ipsos survey, 61% of respondents said trading on prediction markets resembles gambling while only 8% called it investing. Advocates argued that the risks are concentrated among young men, who are more vulnerable to gambling harm, and warned that rebranding sports bets as “event contracts” can obscure financial risk. Platform executives have countered that their contracts function like swaps and that equating them with gambling would blur the line across U.S. capital markets.

The split has practical consequences. If lawmakers accept that these contracts are wagers, state regulators and tribal authorities would gain primacy, bringing geofencing, 21-and-over rules and tax collections. If the contracts are treated as federally regulated derivatives, platforms can offer them across state lines under CFTC supervision with fewer state controls.

States test the limits of their authority

Regulators in several states have not waited for Congress. Connecticut ordered platforms to stop listing sports event contracts, part of a broader move by state agencies to assert jurisdiction over betting-like products. Arizona went further, with officials bringing the first criminal charges tied to a prediction market’s alleged illegal gambling.

Operators have pushed back in court. Kalshi has sued state regulators in multiple venues, arguing that the Commodity Exchange Act preempts conflicting state gambling rules. In Maryland, the company filed suit after receiving a cease-and-desist letter, asserting that the state’s action intrudes on a federal framework for derivatives oversight and seeking an injunction. The complaint, outlined in coverage of the Maryland case, mirrors a legal strategy that recently won Kalshi a temporary injunction against the Nevada Gaming Control Board.

The wave of state actions has created a patchwork. Some users find products restricted or rebranded overnight. Platforms warn the uncertainty will drive activity offshore where consumer protections are weaker. State officials say the opposite risk looms larger: that unlicensed sports bets operate nationally without the age limits, location controls and problem gambling tools mandated for sportsbooks.

Industry mobilizes in Washington

Facing fragmented rules, major crypto and trading brands have banded together. Kalshi and Crypto.com convened the Coalition for Prediction Markets with partners that include Coinbase, Robinhood and Underdog. The group aims to defend federal jurisdiction over event trading and to set common integrity standards such as insider-trading protections. In announcing the effort, the coalition cited estimates of nearly $28 billion in trading volume through October and polling it says shows voter support for federal oversight. Its launch, detailed in coverage of the new coalition, framed the state-by-state push as a threat to clarity and access.

The coalition is betting that a unified message can sway both regulators and lawmakers. It argues that federal supervision enables consistent compliance expectations and market surveillance, and that event contracts help price information the way futures markets do for commodities. Critics counter that sports outcomes lack the hedging utility Congress envisioned when it wrote the derivatives laws and that consumer harm, not price discovery, is the defining feature of these products.

Congress enters with a narrow ban

The regulatory ambiguity has invited a legislative fix. A bipartisan bill introduced by Sen. Adam Schiff and Sen. John Curtis would amend the Commodity Exchange Act to bar CFTC-regulated platforms from listing sports betting and casino-style markets. The proposal would outlaw contracts tied to athletic competitions and games like poker or blackjack, drawing a bright line between financial derivatives and wagers. The sponsors argue that federal regulators have allowed sports contracts to proliferate nationwide in violation of state law, and that Congress should close what they call a backdoor for illegal gaming. The measure and its rationale are detailed in coverage of the Schiff-Curtis bill.

If enacted, the bill would not settle every dispute, but it would foreclose the fastest-growing category on prediction platforms and shift power back to states. It also raises questions about where to draw boundaries for other event contracts, including those tied to entertainment awards or pop culture, which can resemble wagers in form if not always in volume.

What’s at stake for consumers and markets

The debate turns on basic trade-offs. Treating sports event contracts as gambling would likely impose 21-and-over limits, state taxes and responsible gaming mandates across platforms. That could reduce underage access and align oversight with existing sportsbooks, as supporters of state regulation argue in the American Gaming Association survey write-up. Keeping them under federal derivatives rules could preserve nationwide access and a single compliance regime, as the industry coalition contends, but would leave most consumer protections to CFTC enforcement and platform policies.

The next moves will come from courts, statehouses and Capitol Hill. Lawsuits like Kalshi’s Maryland challenge test the limits of federal preemption. State regulators are likely to keep probing offerings that look like bets. And the Schiff-Curtis bill, if it advances, would set a federal ceiling on what CFTC-supervised exchanges can list. For an industry that has built momentum on nationwide access, the policy direction will determine whether sports prediction trading remains a growth engine or becomes a regulated niche alongside state-licensed sportsbooks.