AGA criticises CFTC’s proposed event contract rules
The American Gaming Association (AGA) has criticised a new proposal from the Commodity Futures Trading Commission (CFTC), arguing that the regulator’s latest move could further blur the line between prediction markets and sports betting.
The criticism follows the CFTC’s publication of a Notice of Proposed Rulemaking (NPRM) that seeks public comment on amendments to Regulation 40.11 and the addition of a new framework for assessing event contracts, including those linked to sporting events.
In a statement, AGA President and CEO Bill Miller described the proposal as “a remarkable attempt to redefine what constitutes sports betting.”
“It makes a mockery of congressional intent while going against a bipartisan coalition of 41 Attorneys General, countless legislators across the country, and the 81% of voters who recognise that the so-called ‘prediction markets’ are backdoor sportsbooks evading state and tribal law,” Miller said.
The AGA has been among the most vocal opponents of sports-related prediction markets, arguing that they allow operators to offer sports wagering products without complying with state gaming regulations or contributing tax revenue to local communities.
“The consequences are real,” Miller added. “‘Prediction markets’ evasion of state and tribal laws is estimated to have already cost communities across the country more than $1 billion in sports betting tax revenue, hurting critical local projects. This siphoning will intensify as ‘prediction markets’ continue refusing to comply with state and tribal law.”
The comments come as legal and regulatory tensions continue to grow between prediction market operators and state gaming authorities, with several states challenging the legality of sports event contracts offered by federally regulated exchanges.
CFTC proposes new review process
In a statement published on Wednesday, the CFTC said the proposed rules are intended to create a structured process for determining whether event contracts involve activities listed in the Commodity Exchange Act, including terrorism, assassination, war, gaming, or conduct unlawful under federal or state law.
According to the regulator, the growth of event contracts traded on CFTC-registered platforms, particularly those tied to sporting events, has prompted the need for greater clarity.
“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” Michael Selig, CFTC Chairman, said. “This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinise while letting legitimate markets move forward.”
The proposal outlines a 90-day review process and introduces a series of public-interest criteria to be applied on a contract-by-contract basis. It also seeks to define key statutory terms, including “involve” and “gaming.”
Sports contracts remain under scrutiny
While the proposed framework does not introduce a blanket ban on sports-related contracts, documents released by the CFTC indicate that certain markets may be considered contrary to the public interest.
These include highly specific “micro-bets,” such as wagers on a single pitch in baseball or a specific shot taken by an individual player. Contracts tied to player injuries, officiating decisions, physical altercations and pre-collegiate sporting events could also face heightened scrutiny.
By contrast, contracts based on broader sporting outcomes, such as final scores, tournament progression and season-long performance metrics, are viewed more favourably by the Commission because they may provide information and price-discovery benefits while presenting lower manipulation risks.
The proposal also addresses political event contracts, with the CFTC indicating that elections do not fall within its interpretation of gaming because outcomes are determined by voter choices rather than chance. A 45-day public consultation period has now opened.
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