Federal Government Sues 3 States Over Prediction Market Curbs as Sports-Bet Jurisdiction Splits
Updated
Updated · MarylandReporter.com · Aug 9
Federal Government Sues 3 States Over Prediction Market Curbs as Sports-Bet Jurisdiction Splits
3 articles · Updated · MarylandReporter.com · Aug 9
Summary
Three states are now being sued by the federal government for trying to regulate prediction-market platforms that offer contracts on sports, elections and weather events.
The dispute turns on whether those products are federally regulated derivatives under CFTC oversight or unlicensed gambling subject to state gaming law, a fight that has already frozen some state enforcement efforts.
Tennessee ordered Kalshi, Polymarket and Crypto.com to stop offering sports contracts in January, and Maryland lawmakers are now weighing whether similar platforms need state licenses.
Maryland already taxes licensed sportsbooks operating since 2022, while prediction markets currently sit outside that state framework, sharpening concerns over consumer protections and lost revenue.
The next 6 to 12 months are likely to bring more cease-and-desist orders and federal rulings that could define whether states or Washington control this fast-growing betting market.