Prediction markets are just gambling. Kansas must regulate them that way | Opinion
In Kansas and across the country, lawmakers, regulators and gaming operators have spent years building a safe, transparent and effective regulatory system for legal gambling. Whether it’s sports betting or casino gaming, state laws are clear: Gambling must be conducted responsibly, licensed through state or tribal compacts and monitored for integrity. But a new threat is emerging that risks undermining this structure — prediction market platforms offering gambling products under the auspices of Commodity Futures Trading Commission regulation.
Prediction markets allow users to buy and sell so-called “contracts” on the outcome of events, from who will prevail in this spring’s papal proceedings to whether the Chiefs will repeat as AFC champions. While prediction platforms have tried to characterize these contracts as financial investing, in practice, when it includes sports contests and outcomes, these markets are effectively gambling platforms with little oversight and regulation. If you wager money on whether the Chiefs will win on any given Sunday, that’s a bet. Whether you call it a derivative or an event contract, the intent and effect are the same.
All of this exposes a more important problem. By positioning themselves as financial products rather than gambling wagers, prediction market operators are attempting to sidestep the very rules that protect Kansas consumers — and worse, conflating gambling with a wealth creation exercise rather than fun and entertainment.
Equally concerning, the Commodity Futures Trading Commission was never designed to regulate gaming. Its mission is rooted in agriculture — to protect farmers, ranchers and producers from price volatility in commodities such as corn, wheat and livestock. As former CFTC Chairman Heath Tarbert put it: “America’s farmers and ranchers are at the heart of the real economy and the markets we regulate.” Yet today, the commission is being asked to oversee contracts on products that have nothing to do with commodities and everything to do with gambling.
In fact, another former commission chair, Rostin Behnam, made that clear when opposing election-based contracts last year, cautioning it would drag the agency “well outside of its traditional areas of responsibility.” By stretching its mandate to cover prediction markets that mimic gambling, the CFTC isn’t just stepping on state authority — it’s stepping away from its core obligation to rural America.
Kansas legalized sports betting in 2022 under a framework built on integrity, consumer protection and public benefit. Operators are licensed and monitored, required to verify identity and age, follow responsible gaming standards and pay more than $12.8 million in taxes annually that fund economic development, education and problem gambling programs. Sports betting operators, in coordination with state gaming regulators, also partner with sports leagues to monitor suspicious activity and maintain trust in the games we love.
Prediction market platforms offer none of these safeguards. Even more concerning, they’re not required to follow responsible gaming best practices or integrate with Kansas’ self-exclusion programs, all while marketing themselves aggressively to consumers without the clear disclosures or boundaries Kansas regulators demand from licensed operators.
Allowing prediction market platforms to expand outside of state regulatory systems undermines state and tribal sovereignty and opens a dangerous backdoor to unregulated gambling. This is a clear attempt to skirt state gambling laws. Without robust rules, consumers get hurt, integrity in sports suffers and the public loses confidence in both the games and the markets surrounding them.
This isn’t just a Kansas issue. Last month, 34 state attorneys general — Kansas’ not among them — filed an amicus brief in the U.S. Court of Appeals for the Third Circuit, supporting New Jersey in defense of the state-regulated sports betting market. Their message is clear: Prediction market event contracts that mimic sports betting must be subject to state gambling laws, not financial market loopholes. We applaud this bipartisan coalition for defending states’ rights and standing up for consumers across the country.
If a product looks like a bet, acts like a bet and is marketed like a bet, it should be regulated as a bet. In Kansas, that means it must answer to state regulators — not exploit a commodities regulator whose mission is rooted in agriculture. Gambling laws should be made and enforced by the states that have built systems to it responsibly, not through financial loopholes within a federal agency straying from its core purpose.
This story was originally published July 9, 2025 at 5:01 AM with the headline "Prediction markets are just gambling. Kansas must regulate them that way | Opinion."