44 states are aligned on one thing in their fight against prediction markets. It's about sports wagering

July 28, 2026 - 22:40

A coalition of 44 state attorneys general has submitted a joint letter to federal regulators, voicing unified opposition to the expansion of prediction markets that involve sports wagering. The letter, filed during the public comment period for the first draft of a proposed rule on regulating prediction markets, argues that such platforms threaten the integrity of state-regulated sports betting systems.

The states contend that prediction markets, which allow users to bet on outcomes of events like elections or sports games, operate in a legal gray area that undermines existing gambling laws. They specifically target platforms that offer contracts on sporting events, claiming these products function as unlicensed sportsbooks. The attorneys general warn that allowing these markets to flourish could erode consumer protections, reduce tax revenue for state programs, and create regulatory confusion.

The letter urges the Commodity Futures Trading Commission to classify sports-related event contracts as illegal gambling under federal law. It emphasizes that states have spent years building robust frameworks for legal sports betting, and that prediction markets could bypass those safeguards. The coalition argues that without clear federal action, these platforms could exploit loopholes to offer betting options that states have deliberately chosen to prohibit.

This coordinated push marks a significant escalation in the ongoing debate over the boundaries of prediction markets, which have grown in popularity but face increasing scrutiny from both state and federal authorities. The commission is expected to consider the feedback as it finalizes its rulemaking.