State attorneys general urge federal regulators to leave sports prediction markets to states
Updated
Updated · KSWO · May 4
State attorneys general urge federal regulators to leave sports prediction markets to states
16 articles · Updated · KSWO · May 4
Oklahoma Attorney General Gentner Drummond said 40 other attorneys general joined comments filed with the CFTC targeting platforms including Kalshi and Polymarket.
They argued the markets let users bet on winners, spreads and player statistics while sidestepping state gambling laws, consumer protections and tax regimes.
The push adds to a wider CFTC review that drew 1,541 public comments from leagues, betting firms and players' unions over integrity and legal concerns.
As billions pour into these markets, can new rules protect sports integrity from corruption?
Are these platforms innovative financial tools or just unregulated sportsbooks in disguise?
Who will win the war over prediction markets: federal regulators or state gambling laws?
1,541 Public Submissions Fuel CFTC's 2026 Crackdown on Prediction Markets After Military Insider Trading Case
Overview
In early 2026, a U.S. Army soldier was indicted for insider trading on Polymarket using confidential military information, alongside suspicious bets on a U.S.-Iran ceasefire and Kalshi Inc.'s adjustment of agricultural contract trading hours. These incidents triggered the CFTC's comprehensive review, which gathered over 1,500 public comments and led to proposals for enhanced transparency, contract bans on sensitive events, aligned trading hours, and stronger anti-insider trading safeguards. Sports leagues and state regulators strongly opposed market expansion, demanding strict protections and asserting state authority, fueling legal battles that are headed to the Supreme Court. Meanwhile, platforms are already adapting to new rules, marking a critical turning point for the future regulation and legitimacy of prediction markets.