Two major U.S. casino trade groups have raised concerns over sports-related event contracts offered by federally regulated prediction markets. The Nevada Resort Association and the Casino Association of New Jersey submitted letters to the Commodity Futures Trading Commission (CFTC), warning that these contracts could threaten their local economies and undercut state-regulated gaming.
Concerns Over Regulation and Local Impact
The contracts in question allow users to trade outcomes of sports events—like betting on whether Florida wins the NCAA men’s tournament—via platforms such as Kalshi and Crypto.com. Although traditional sports betting is tightly regulated at the state level, these federally regulated event contracts are available nationwide.
Casino groups argue this creates a loophole. “Allowing for sports wagering to happen outside of state regulated channels puts citizens at risk and endangers the critical economic support gaming provides,” said Virginia Valentine, head of the Nevada Resort Association. She noted that gaming drives 43% of Nevada’s GDP and employs more than a quarter of the state’s workforce.
New Jersey’s casino industry echoed these concerns. “We are deeply concerned about the availability of sports events contracts, the economic impact it will have on New Jersey, and the consumer harm that may come to our citizens,” wrote Mark Giannantonio, president of the Casino Association of New Jersey.
States Stress Loss of Control
New Jersey operators pointed to strict rules they must follow—such as bans on cryptocurrency wagering and betting on in-state college games—while noting that these federally approved markets operate outside those limits.
The state’s casino group also reminded the CFTC of New Jersey’s role in striking down PASPA in 2018, which helped launch the modern era of legal sports betting. Since then, the state has collected over $100 million in tax revenue from sportsbooks and introduced responsible gaming policies required by law.
The CFTC has received similar concerns from more than 20 other organizations, including Native American tribes, commercial operators, and Major League Baseball. While prediction markets started with contracts on politics and economics, their rapid expansion into sports has triggered fresh debate.
Regulators Act on Prediction Markets
Prediction markets have surely been on regulators’ radars for a while now. On Monday, Maryland has ordered Kalshi, Robinhood Derivatives, and Crypto.com to shut down their online sports event prediction markets, joining five other states—New Jersey, Nevada, Ohio, Illinois, and Montana—that have already issued similar warnings to at least one of the firms.
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