By AZ Capitol Times
Key Points
- States are defending their jurisdiction over prediction markets in court
- The CFTC has historically avoided regulating sports betting, gambling
- The agency was greatly impacted by the Trump admin. government downsizing
The federal government has grown increasingly combative in recent weeks defending what it purports to be its “exclusive jurisdiction” over prediction markets.
The Commodity Futures Trading Commission, which once shied away from the industry, has sued five states since April in an effort to block enforcement of their gambling statutes. And President Donald Trump this week took his most overt stance to defend prediction markets in a lengthy social media post.
Federalism has been on full display in the fight over who controls prediction markets, as the federal government spars with states for regulatory oversight.
State regulators say the sites — which let users bet billions of dollars a week on the outcome of practically anything, from the NBA Finals to elections — are no different than any other gambling website and should be beholden to the same laws and taxed the same way. States are estimated to have missed out on more than $1 billion in taxes since prediction markets began offering sports events contracts, according to a running tally by the American Gaming Association.
