NCLGS Urges Congress to Classify Prediction Markets as Illegal Gambling
The National Council of Legislators from Gaming States has come out against prediction markets, providing comments on their stance at its summer meeting.
The executive committee of the NCLGS approved a resolution for Congress in an effort to get them to clarify that prediction markets are a form of illegal online gambling and as a result, tribes and states need to decide that gaming they want to regulate or not.
The resolution at the San Diego meeting said prediction markets “have rapidly expanded in the United States, allowing participants to wager on the outcomes of political elections, economic indicators, sporting events, and other real-world occurrences” and that “these platforms choose largely to operate outside the established regulatory frameworks governing licensed sports betting, casino gaming, and other forms of legalized gambling.”
The biannual conference includes legal scholars, gaming regulators, industry executives, financial market experts, attorneys, and policymakers.
“NCLGS exists to provide legislators with objective, substantive education on the most important issues facing gaming policy,” said Juliann Barreto, Chief Operating Officer of Spectrum Gaming Group. “Prediction markets represent one of the most significant emerging issues confronting state policymakers, and we have ensured that our members hear directly from experts on all sides of the debate.”
NCLGS Resolution Calls for Federal Action
The resolution includes six points:
- Opposes the expansion of unregulated and unlicensed prediction markets that allow wagering on political, economic, sporting, and other real-world event outcomes outside established state and tribal gaming regulatory frameworks.
- Calls upon the United States Congress to clarify the legal status of prediction markets and establish clear federal guidelines that prevent regulatory arbitrage and protect consumers. It also urges Congress to clarify that such markets constitute illegal gambling and that regulatory and licensing authority should rest with the respective state and tribal governments.
- Urges the Commodity Futures Trading Commission (CFTC) to stop treating political and sports-related prediction markets as legitimate financial instruments that are exempt from gaming regulation.
- Encourages member states to review their existing gaming statutes and, where appropriate, assert licensing and regulatory jurisdiction over prediction market activity occurring within their borders.
- Affirms the sovereign authority of states and tribes to regulate gambling within their jurisdictions and opposes any federal action that would preempt that authority in favor of unregulated prediction market platforms.
- Directs NCLGS leadership to communicate this resolution to the United States Congress, the CFTC, the National Governors Association, and other relevant federal and state entities.
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