Bennington
State Officials Target Online Prediction Markets Over Gambling Concerns
CHICAGO — The escalating feud between states and online prediction markets was on full display at a summit of state lawmakers this week as legislators publicly scolded Kalshi and Polymarket, the two most prominent platforms. Prediction market platforms say they…
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Key points
- State lawmakers contend that online prediction markets like Kalshi operate as unregulated sports betting platforms.
- A coalition of 44 state attorneys general is challenging federal attempts to exclude states from regulating event wagers.
- Public health experts warn that mobile prediction markets pose risks of underage gambling and financial harm.
CHICAGO NewsWK — State lawmakers across the country are raising alarms about online prediction markets like Kalshi and Polymarket, arguing these digital platforms operate as unregulated sportsbooks that bypass state gaming laws and consumer safeguards. For residents in Bennington County and Southern Vermont, the national debate highlights growing local concerns over how accessible mobile betting platforms affect consumer protections and public health.
According to a report first published by Stateline, state legislators publicly confronted executives from leading prediction platforms during a summit of the National Conference of State Legislatures in Chicago. Officials contend that by offering contracts based on sports outcomes and real-world events, prediction markets serve as a loophole to evade state gambling regulations and age restrictions.
Federal Oversight Versus State Authority
Platform operators contend that their services function like traditional commodities exchanges rather than gambling venues. Representatives argue that their operations fall strictly under the jurisdiction of the federal Commodity Futures Trading Commission, which regulates derivatives trading.
Sara Slane, head of corporate development at Kalshi, stated that prediction markets require a national standard rather than a “state-by-state regulatory patchwork,” as reported by Stateline.
However, state regulators and legal officials strongly reject that position. A bipartisan coalition of 44 state attorneys general recently sent a letter to federal regulators, asserting that the federal agency lacks authority over sports-related contracts and that these activities must submit to state gaming rules.
Key Issues Facing Communities
Lawmakers and public health experts have pointed to several pressing issues surrounding prediction markets:
- Underage Participation: State leaders reported incidents of high school students opening accounts to bet on sporting events, bypassing state minimum age requirements.
- Insider Information: Recent cases involving individuals using nonpublic information to place wagers have led multiple states to pass restrictions for public employees.
- Gambling Addiction: Researchers note that high-speed, mobile access to unregulated event betting carries similar risks for financial strain and addiction as traditional sports gambling.
What Happens Next
With numerous lawsuits filed between states, federal regulators, and private platforms, legal experts expect the jurisdictional battle to eventually reach the U.S. Supreme Court. In the meantime, state officials continue to explore legislative avenues to enforce local gaming regulations and protect consumers.
This article was produced with the assistance of AI and reviewed by our editorial team.
Based on reporting by Kevin Hardy originally published by Stateline. Read the original story.
