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The former chief of staff to President Donald Trump, who also headed up the Consumer Financial Protection Bureau and Office of Management and Budget during his extensive government career, has launched a new coalition seeking state regulation for prediction markets.
On Monday, Mick Mulvaney launched Gambling is Not Investing, arguing that individual states should regulate prediction markets, rather than the federal Commodity Futures Trading Commission, which currently oversees entities like Kalshi and Polymarket.
Mulvaney made clear to The Hill that he sees prediction markets functioning as gambling outlets.
“Gambling products – regardless of what you call them – must follow established state and tribal laws. Rebranding sports wagering as ‘trading’ or ‘investing’ or ‘predicting’ misleads consumers, undermines responsible gaming protections, and weakens the state and tribal systems built to protect the public and fund vital community services.”
Mulvaney was even more blunt talking to CNBC Tuesday.
“I buy a prediction contract, whatever that is, on the Lakers winning the basketball game. If you ask any ordinary human being if that’s sports gambling, it absolutely is, they would think that it is.”
Mulvaney also critical of wagering on governmental actions
Mulvaney served as Trump’s chief of staff late in the president’s first term, from 2019 to 2020, and more recently has been a CBS News contributor.
Mulvaney was also critical of a recent prediction market offering: wagering on if and when the US would invade Iran.
He even floated the possibility that those whose wagers won on the proposition should be investigated to determine whether knowledge of classified information figured into their predictions.
Challenge in California
California is currently a testing ground for whether prediction markets should legally be subject to the same restrictions as gambling. Three California tribes are contesting Kalshi’s ability to operate in the Golden State per the Indian Gaming Regulatory Act (IGRA).
Kalshi won what was effectively the first round in the case, when a preliminary injunction was denied by a US District Court judge. The judge determined the Unlawful Internet Gambling Enforcement Act, and not the IGRA, would apply to Kalshi’s activities in the state.
Prediction markets have been able to offer what is effectively California sports betting even though voters shot down attempts to legalize sports wagering four years ago.
The same is happening in Texas, which also outlaws sports wagering. Together, the two states contain more than 70 million people, over 20% of the US population. Up until prediction markets began allowing sports contracts, the states were considered the top untapped markets for sportsbooks.
