(AsiaGameHub) –   A bipartisan coalition of 41 state attorneys general is calling for clear rules on who has control over sports-related prediction markets, asserting that states should maintain full regulatory authority.

States Should Continue Current Practices

Iowa Attorney General Brenna Bird made the announcement at the beginning of the week, stating that U.S. states have long managed gambling within their jurisdictions and should continue doing so without federal interference.

Bird emphasized that state regulators and legislatures are best positioned to enforce gambling laws, collect taxes, and safeguard consumers from potential harm.

The focus of the debate centers on prediction markets—online platforms where users trade contracts based on real-world events.

Some platforms, including Polymarket and Kalshi, enable users to effectively place bets on sports outcomes, such as game winners, point spreads, and individual player statistics.

Coalition Calls on CFTC to Clarify Its Jurisdiction

The coalition contends that these products function similarly to traditional sports betting but operate outside established state gambling regulations.

Because they are structured as financial contracts, they are currently regulated by the Commodity Futures Trading Commission (CFTC) rather than state gaming authorities.

In a formal filing submitted to the CFTC, the attorneys general in the coalition requested that the agency use rulemaking to clarify it does not have jurisdiction over sports-related contracts.

They argue that permitting these platforms to operate without state oversight undermines existing gambling laws and weakens consumer protections.

Bird and her colleagues also raised concerns about the societal impacts of sports gambling, including risks such as addiction and financial instability, which they believe are more effectively addressed by state-level regulation than federal oversight.

The coalition further noted that courts have previously affirmed the authority of states in similar regulatory disputes, arguing that prediction markets tied to sports outcomes should not be exempt from local gambling laws or tax requirements.

The letter arrives amid federal regulators’ review of how to classify and regulate prediction markets—a rapidly expanding sector at the intersection of finance and gambling.

The outcome of this evaluation could determine how these platforms operate nationwide and whether states regain direct regulatory control.