Better Markets, a nonpartisan public policy group, is amplifying its opposition to operators of prediction markets, claiming that platforms providing what they call event contracts are essentially offering nationwide gambling services without adhering to state gaming regulations.

The organization argues that companies like Kalshi, Polymarket, and Crypto.com market their offerings as financial products, despite users betting on actual events such as elections, sports matches, and award shows.

“The nature of these activities is akin to gambling in casinos, sportsbooks, or with local bookmakers; hence, ‘prediction market’ participants can wager on a variety of topics from elections and sports to award shows and even the second coming of Jesus Christ,” states Better Markets.

The organization further insists that labeling these as event contracts enables operators to evade traditional state oversight of gambling, even as they provide services similar to those of casinos and sportsbooks.

Better Markets has also expressed concerns over the industry’s regulatory framework, particularly criticizing the Commodities Futures Trading Commission, the federal body tasked with regulating derivatives markets and currently overseeing prediction market platforms.

“The CFTC is a federal agency lacking the experience, resources, or budget necessary to oversee gambling activities across all 50 states, covering an unlimited range of topics. This distraction undermines the CFTC’s vital mission of regulating the multi-trillion-dollar derivatives and commodities markets,” the organization contended.

“Americans rely on the CFTC to ensure the availability of essential goods like breakfast cereals, lunch bread, automotive fuel, and heating oil at the appropriate times, in adequate quantities, and fairly priced according to supply and demand.”

This organization has been actively participating in the debate surrounding prediction markets since 2022, utilizing regulatory filings, court cases, and public advocacy to voice its concerns.

The policy entity maintains that event contracts related to outcomes like sports competitions do not fulfill the criteria established by the Commodities Exchange Act, which empowers the CFTC to manage derivatives such as futures, options, and swaps only when these instruments serve legitimate financial utility and hedging purposes.

Better Markets also references a decision from 2011 where the CFTC prohibited event contracts concerning war, assassination, terrorism, gaming, or any activities illegal under state or federal statutes.

In earlier congressional discussions on derivatives regulation, Better Markets highlights statements by former Senator Blanche Lincoln, then chair of the Senate Agriculture Committee, underscoring that lawmakers did not intend to “permit gambling via supposed ‘event contracts,’” including any contracts based on “sporting events” like the Super Bowl, Kentucky Derby, or Masters Golf Tournament.

Additionally, the organization observed that Kalshi acknowledged similar distinctions in past court documents, indicating that “Congress did not intend for sports betting to occur on derivatives markets.”

The group asserts that prediction market operators are implementing gambling activities nationwide without the necessary regulatory oversight that is typically required for the betting industry.

“These companies have unleashed unregulated nationwide gambling without any oversight or review from elected representatives, regulatory bodies, or policymakers, despite the substantial public interest in properly managing gambling to exclude criminal elements, prevent minors from participating, prohibit unethical gamification and AI deepfakes, and address addiction and social issues like alcoholism, substance abuse, financial ruin, domestic violence, and other societal challenges frequently linked to gambling,” states the policy organization.