Atlantic City’s casino industry has urged the U.S. Commodity Futures Trading Commission to prevent federally regulated prediction markets from offering sports-related contracts in violation of state gambling laws, warning that the agency’s proposed approach could displace established state and tribal authority over gaming.
The Casino Association of New Jersey, which represents the city’s nine casinos, submitted comments to the CFTC on Monday as the agency considers rules governing the expanding market for event-based “contracts.” The association specifically asked the commission to stop companies such as Kalshi and Polymarket from accepting sports wagers, particularly in states where sports betting remains illegal.
The dispute has implications for traditional casino operators, which pay millions of dollars in licensing fees, taxes and regulatory costs to operate under state gambling systems. The American Gaming Association, the industry’s national trade group, estimates that prediction market companies have caused states to lose more than $1 billion in tax revenue.
Casinos have also argued that prediction market operators do not provide the player protections required of state-licensed gambling businesses. Kalshi rejected that characterization in separate comments filed with the CFTC on Monday, stating that the prediction market industry “is federally regulated, fully collateralized, transparent, and subject to comprehensive surveillance.”
“The Commission should give substantial weight to the conclusion that sports event contracts advance the public interests articulated in (the Commodity Exchange Act) more squarely, not less, than many longstanding categories of futures and swaps,” the company wrote.
Other sports and gambling organizations have also called for changes or clarification. FanDuel, which offers both traditional sports betting and prediction market products, requested greater clarity about how the commission’s rules would apply to sporting events. It also supported close monitoring and consumer protection requirements for prediction market wagers.
The NFL separately told the agency its “draft rules fall significantly short of protecting the integrity of sporting events, and the fans who participate in these markets.”
The league asked the CFTC to prohibit contracts involving events that could be easily manipulated by one person. It also sought restrictions on contracts tied to non-public information, including injury status, game plans and other inside knowledge.
States have increasingly turned to litigation in attempts to stop prediction market platforms from offering sports contracts, arguing that the activity violates state gambling laws, particularly in jurisdictions that have not legalized sports betting. New Jersey previously sought to prohibit Kalshi from operating in the state but was blocked by a federal court ruling.
The legal conflict follows New Jersey’s 2018 victory before the U.S. Supreme Court, which allowed each state to decide whether to legalize sports betting. More than two-thirds of states have since done so.
Derek Shaffer, an attorney for the Casino Association, wrote that the Supreme Court justices “all agreed that states had the authority to ban or regulate sports betting.” Shaffer argued that a lack of federal enforcement against sports contracts would effectively permit sports betting nationwide, regardless of state policy.
“Under the proposal, the Commodity Futures Trading Commission will effectively bless sports betting throughout the United States just by failing to pursue an enforcement action against any CFTC-regulated market that opts to list a sports bet on its platform,” he wrote.
“That would override the will of the people in states around the country, including California and Texas, which have considerable differences between them but have both chosen to ban sports betting. It will also strike at the sovereign prerogatives of states and Indian Tribes that are relying on gaming revenue to fund essential public programs.”
He also said the commission would assume the role of a national gambling regulator without authorization or consent from states and tribal governments.
Shaffer argued that the proposal would effectively position the CFTC as the country’s primary gaming regulator, allowing it to decide which contracts may be offered despite Congress not granting it authority to displace the established role of states in regulating gambling. He added that the commission was moving beyond its expertise by taking on the complexities of gaming oversight.
Original article: https://www.yogonet.com/international/news/2026/07/30/125644-atlantic-city-casinos-urge-cftc-to-block-sports-prediction-markets
