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Lottery organizations are stepping up pressure on regulators over prediction markets, arguing that sports and event contracts offered on those platforms amount to gambling and should be regulated the same way as other wagers.
The North American Association of State and Provincial Lotteries, which represents 50 member lottery organizations, said regulators have allowed prediction markets to gain legitimacy even as they offer products tied to sports outcomes. NASPL specifically criticized the Commodity Futures Trading Commission, saying the agency has effectively given credence to what it views as illegal gambling.
In its statement, NASPL argued that the core issue is not branding but how the products work. The group said that even if users claim some skill is involved, the outcome still depends heavily on chance, making the contracts a probable wager.
That matters to lottery operators because they say prediction markets can compete with regulated gaming without taking on the same costs. NASPL said prediction market operators do not pay state taxes on operational revenue or the licensing fees required of traditional gambling businesses. It also warned that this could threaten public programs funded by lotteries, including education, scholarships, local grants, property tax relief, and senior programs.
The group said it is aligned with the World Lottery Association, which published a position paper in May calling for urgent regulatory clarification in jurisdictions where prediction markets offer sports trading. The WLA took a similarly direct position, saying that if a product offers a financial return based on the outcome of a sporting, political, or other event, it constitutes a wager or bet and should be licensed and regulated as such.
The dispute is not limited to sports. The source article said lottery organizations are also targeting prediction market event contracts involving politics.
For players, the immediate takeaway is that this is a regulatory fight over whether prediction market products should be treated more like financial trading or more like gambling. No formal new rule or enforcement action was identified in the source report, but lottery groups are clearly pushing for a stricter approach.
What to watch next is whether the CFTC or state-level gambling authorities respond with clearer guidance. For now, the main development is growing pressure from lottery organizations that say prediction markets are operating inside gambling territory without the same oversight.
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Source: As reported by casino.org.
