Posted 7 May, 2026
A bipartisan coalition of 41 attorneys general is urging federal regulators that states should have jurisdiction over sports-related “event contracts.”
The coalition filed a formal comment with the Commodity Futures Trading Commission (CFTC), arguing that prediction markets – platforms where users trade contracts on the outcome of future events – have effectively become unregulated sportsbooks. 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 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.