States Push Back on Federal Control of Prediction Markets Amid Rising Concerns

The National Council of Legislators from Gaming States (NCLGS) has firmly endorsed the idea that both sports wagering and broader gambling policies should remain under state jurisdiction, especially as the conversation around prediction markets heats up across the country.

In July, the NCLGS Executive Committee reached a unanimous decision to support this position during their meeting in San Diego. Their resolution highlights the rapid growth of prediction markets, platforms where users can place bets on various outcomes ranging from sporting events to political elections, often operating outside the usual regulatory frameworks associated with licensed betting entities. This is an interesting development, especially considering how individuals increasingly seek new ways to participate in betting that skirts traditional regulations.

NCLGS Voices Concerns About Federal Oversight

The NCLGS has indicated that prediction markets have become a significant topic at their national gatherings. To better understand the implications, they've convened a diverse group of experts, including legal scholars, industry executives, and policymakers, to evaluate whether these markets fall under federal commodities regulations or should be governed by state gaming laws. This gathering speaks to the growing complexity of a betting phenomenon that demands nuanced attention from various stakeholders.

THE RESOLUTION OF NCLGS
A Resolution Opposing the Expansion of Unregulated Prediction Markets & Urging Federal & State Action to Protect Consumers & Regulated Gaming Markets. Our Executive Committee unanimously approved this.
Press Release: https://t.co/r9mnAtqCLc#NCLGS pic.twitter.com/2OsJW4shCy

— NCLGS (@NCLGS) July 27, 2026

Juliann Barreto, COO of Spectrum Gaming Group, which supports NCLGS, remarked, “NCLGS aims to offer legislators substantial insights on pressing gaming policy matters. Prediction markets pose significant challenges for state policymakers, and we ensure our members hear from experts across the spectrum." This insight reflects a growing urgency in the conversation around prediction markets, one that doesn’t only involve state oversight but touches upon wider implications for consumer trust and regulatory integrity. The growing attention on prediction markets is partly fueled by a coalition of 44 state attorneys general who are also pushing back against federal jurisdiction.

This coalition has called on the Commodity Futures Trading Commission (CFTC) to withdraw proposed regulations they believe would inappropriately transfer oversight of sports betting from the states to a federal entity unauthorized to manage gambling activities. The coalition argues vehemently that significant investments have been made by states to build secure licensing systems and consumer protection measures. They posit that sports wagers do not fit within the financial derivative definitions under the Commodity Exchange Act, an argument that underscores a fundamental disagreement about how to classify and regulate betting practices in the U.S.

The NCLGS echoed these concerns, noting that recent congressional hearings have amplified discussions on the topic, further affirming the necessity of maintaining state and tribal governance over gaming issues. The organization advocates that the primary responsibility for gaming regulation should rest with individual states and has encouraged federal lawmakers to consider the existing frameworks prior to pursuing any new regulations. The ramifications of federal oversight could be profound. State systems built over years could be jeopardized, potentially putting consumer protections at risk.

The Future of Prediction Markets

Looking forward, the NCLGS is committed to fostering a national dialogue among policymakers. They aim to ensure that diverse perspectives are heard, engage with legal and regulatory trends, and shape policy grounded in evidence and respectful discourse. This organization prides itself on being the sole national body focused on gaming policy education, attracting a wide array of stakeholders to discuss both regulated and unregulated gambling practices. The future outlook, therefore, hinges on continued collaboration and open dialogue.

What this means for you, whether you’re a state legislator or a participant in the gaming industry, is that the stakes are high. If prediction markets are not adequately regulated, it could lead to a chaotic environment where accountability is blurred. State initiatives may falter, and the very nature of consumer trust in gaming could be deeply affected.

And this is the part most people overlook: state regulation isn't just a matter of jurisdiction; it’s also about consumer protection and trust. Ensuring that expert opinions and stakeholder contributions shape policy will be crucial in the years ahead.

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