On Thursday, members of the Coalition for Prediction Markets presented their arguments to the Commodity Futures Trading Commission (CFTC), emphasizing the distinction between casino games and prediction markets. They described casino games as “entertainment products,” primarily played against the house with no effective price discovery. In contrast, prediction markets are depicted as valuable tools for price discovery, offering insights into the probabilities of future events.
A significant portion of this discussion centers around the sports betting industry, which has seen substantial growth in recent years. According to the Congressional Research Service, nearly 90% of Kalshi’s market volume came from sports events in the year leading up to February. The American Gaming Association reported that legal sports betting in the United States reached a record $167 billion in 2025, marking an 11% increase compared to the previous year. By relinquishing access to slot machines, the Coalition is advocating for the CFTC to formalize a distinction that would safeguard access to this increasingly lucrative market.
Market predictions on platforms like Polymarket indicate a mere 12% chance that a proposed law banning prediction markets from offering sports-related contracts will be enacted this year, although trading volume on this specific prediction remains relatively low at around $10,000. Notably, Polymarket is not affiliated with the Coalition for Prediction Markets.
An additional request made by the Coalition involves a reevaluation of Rule 40.11, which restricts contracts related to terrorism, assassination, war, gaming, or other unlawful activities. They argue that the current interpretation is overly restrictive and exceeds the requirements of the Commodity Exchange Act. A narrower interpretation of the ‘gaming’ ban could potentially protect sports contracts from aggressive regulatory actions and enable platforms like Coinbase and Robinhood to expand their offerings in the future.
Industry projections are optimistic, with Bernstein stating that volumes in the prediction market sector could reach $1 trillion by 2030, contingent on the stability of contracts related to sports events.
Rep. Dina Titus, a Democratic representative from Nevada, expressed her support for the Coalition’s objectives in a social media post, noting her advocacy for H.R. 7477, legislation aimed at regulating casino-style offerings in prediction markets. Her remarks suggest an alignment with the Coalition’s efforts.
However, the regulatory landscape remains contentious. A bipartisan coalition consisting of 41 state attorneys general, co-led by Ohio Attorney General Dave Yost, filed a comment arguing that sports event contracts constitute gambling and should be regulated at the state level. Additionally, Senate Democrats, led by Jeff Merkley of Oregon, submitted a letter on the same day urging the CFTC to impose a complete ban on sports contracts.
Despite these pressures, the 12% probability on Polymarket implies that many traders believe these legislative efforts may not advance as anticipated. The ongoing discussions around regulation and market frameworks underscore a pivotal moment for the future of prediction markets and their intersection with the booming sports gambling industry.
