Yost urging state authority over prediction markets

VW independent staff/submitted information

COLUMBUS — A bipartisan group of 41 attorneys general, co-led by Ohio Attorney General Dave Yost, is urging federal regulators to reaffirm that jurisdiction over sports-related “event contracts” belongs to states.
 
“This is gambling, no matter how they try to dress it up – and that means it belongs under state jurisdiction,” Yost said. “States have a longstanding right and responsibility to protect their citizens from the dangers of gambling, whether it’s on a prediction market or a casino floor.”
 
The attorneys general today filed a formal comment with the Commodity Futures Trading Commission, arguing that prediction markets – platforms where users trade contracts on the outcome of future events – have effectively become unregulated sportsbooks.
 
“Any distinction between sportsbook bets and prediction-market bets is illusory,” the letter says. “On so-called ‘prediction markets,’ users can make all the same wagers they can make at a traditional sportsbook.”
 
The platforms, including Polymarket and Kalshi, allow users to place wagers on game winners, point spreads and player statistics, bypassing the consumer protections and tax requirements mandated by state gambling laws.

Because the contracts are considered entertainment-based gambling rather than tools for financial risk management, they fall outside the CFTC’s jurisdiction, the coalition says. The letter notes that gambling regulation is a state power under well-established case law.
 
The attorneys general caution that sports gambling poses serious risks to public health and financial security, with millions of Americans qualifying as problematic or pathological gamblers. The coalition asserts that states – not the CFTC – are best equipped to protect their residents from the associated harms.
 
The coalition’s letter responds to a CFTC request for public comment on proposed rules for prediction markets. The states urge the commission to confirm through rulemaking that it lacks jurisdiction over sports-related contracts, ensuring that the power to regulate or prohibit sports gambling remains with states.
 
“The CFTC should recognize the limits of its power and affirm that states have the expertise, experience and tools to regulate sports betting as they have for more than a century,” the letter says.
 
Yost is co-leading the coalition alongside the attorneys general of Nevada, New Jersey, New York, Tennessee and Utah. They are joined by Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, Virginia and Wisconsin.