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Gaming Edge’s TL;DR
- A bipartisan group of 41 state attorneys general, led by Maryland AG Anthony G. Brown, asked the CFTC to confirm that sports-related prediction markets fall under state, not federal, authority.
- They argue platforms like Polymarket and Kalshi operate as de facto sportsbooks that bypass state consumer protections and tax rules.
Maryland Attorney General Anthony G. Brown joined a bipartisan coalition of 41 attorneys general in a formal comment to the Commodity Futures Trading Commission (CFTC), urging the agency to reaffirm that jurisdiction over sports-related “event contracts” rests with the states.
The letter argues that prediction markets – where users trade contracts on event outcomes – function like traditional sportsbooks:
“Any distinction between sportsbook bets and prediction market bets is illusory.”
Platforms named in the letter include Polymarket and Kalshi, which the coalition says let users wager on game results, point spreads, and player stats while avoiding state licensing, consumer protections, and tax obligations.
The comment responds to a CFTC request for public feedback on proposed prediction market rules and asks the commission to decline jurisdiction over sports wagers so states retain regulatory control. The filing also references Maryland’s earlier coordination efforts (a common-interest group formed in April 2025) and an April 24, 2026, executive order banning state employees from betting on prediction markets.
Operators might need state license on sports contracts
If the CFTC formally disclaims jurisdiction, states will be empowered to treat sports-related prediction markets like traditional sports betting.
That would likely mean state licensing requirements, stricter age and identity verification, mandatory responsible gaming tools, consumer-protection rules, and taxation – all of which can increase compliance costs for operators and change how bettors access products.
For operators, outcomes range from seeking state licenses or pulling certain event markets from users. Bettors could see both downsides (reduced access to some platforms or markets) and upsides (stronger consumer protections and clearer tax reporting).
The filing also raises legal uncertainty. Operators that frame contracts as entertainment or informational products may face state-level legal and regulatory challenges rather than federal oversight.
The CFTC will review public comments and could issue rulemaking or a formal statement clarifying its reach; timing is uncertain.
Based on reporting by The BayNet and the Maryland Attorney General.
