The recent initiative by the U.S. Commodity Futures Trading Commission (CFTC) to create federal regulations for sports and prediction market contracts has faced backlash from various stakeholders, including lawmakers, Native American tribes, consumer advocates, traditional casinos, and former officials of the agency.

A review of public feedback published Monday revealed that Native American tribes, casino operators, and local governments across 20 states view sports-related contracts from prediction markets as illicit gambling that should be regulated at the state and local level, according to reports by Reuters. In regions like Nevada and Michigan, sports prediction markets are prohibited.

The CFTC’s proposal, unveiled last month, aims to limit contracts associated with activities recognized by federal law, such as crime, terrorism, assassination, warfare, and “gaming.” The agency noted that certain contracts could be outside the “public interest.”

The suggested guidelines would generally permit sports betting to proceed on prediction market platforms like Kalshi and Polymarket. Contracts tied to final scores, win-loss records, and progression in tournaments would likely be allowed, while those dealing with player injuries, fighting, youth sports, and officiating are expected to be banned.

The opposition to this regulation is a direct reaction to last month’s announcement. Although the CFTC has no set deadline for submitting a final proposal, it is anticipated that the agency will evaluate the received comments.

Christopher Dodd, the former Democratic senator who co-authored the pivotal 2010 legislation that granted the CFTC authority over derivatives known as swaps, emphasized that Congress did not aim for the agency to act as a national gambling regulator.

“When Congress enacted Dodd-Frank, we were cognizant of existing federal gaming laws,” he stated. “We had no intention of altering those statutes.”

Former CFTC Chairman Timothy Massad also voiced concerns about the proposal, asserting that the CFTC has strayed from its original purpose.

“Although I have not previously commented on any rule proposal since leaving the agency, it’s essential for me to voice my opinion here as the agency seems to have lost perspective on its mission and the extent of its authority,” Massad expressed.

The administration under President Donald Trump has shown support for the prediction market sector and has initiated legal actions nationwide, arguing that federal regulations allow registered markets to offer event contracts. The administration further claims that state authorities lack the power to disrupt trading of those federally governed derivatives.

Prediction markets enable participants to place yes-or-no bets on various outcomes related to sports, elections, economic shifts, stock market indices, and other events.