44 State Attorneys General, NFL, and Dodd-Frank Architect Push Back on CFTC Prediction Market Rule
A coalition of 44 states, the NFL, and former Sen. Chris Dodd all told the CFTC its proposed prediction market rule oversteps federal authority as the comment period closed.
The public comment period on the Commodity Futures Trading Commission’s proposed prediction market rule closed Monday, and the agency got an earful. A coalition of 44 state attorneys general, the NFL, and even the man who helped write the Dodd-Frank Act all filed objections arguing the CFTC has no business regulating sports-related event contracts.
The proposed rule, tied to amendments to Rule 40.11, would set up a formal review process for event contracts linked to gaming, war, terrorism, assassination, and other sensitive activities. For sports betting specifically, it would require the CFTC to first determine whether a product counts as an event contract, then decide whether it falls under a public-interest review before regulators sign off. More than 1,000 comments poured in before the window closed, and the pushback from state officials and sports leagues was pointed.
44 States Say the CFTC Is Overstepping
The attorneys general letter, led by Ohio Attorney General Andy Wilson, argues the CFTC’s proposed rule “goes beyond the CFTC’s statutory powers, is in tension with the Constitution, and would otherwise be arbitrary and capricious in its current form.” The coalition wants the agency to scrap the draft entirely and start over with language that explicitly confirms sports bets and gambling contracts can’t be traded on designated contract markets — leaving that regulatory turf to the states, where it has always lived.
“States have long regulated gambling — including sports bets. The federal government has not,” the letter states. Attorneys general from Florida, Georgia, New Hampshire, Missouri, and Texas notably did not sign on, but the remaining coalition spans states with both legal sports betting and states without it, a sign the jurisdictional argument is resonating well beyond the traditional gambling-industry lobby.
The NFL and Dodd-Frank’s Architect Weigh In
The NFL sent its own letter to CFTC Chair Michael Selig, urging the commission to rein in the growth of sports prediction markets. The league argued the current proposal falls short of protecting the integrity of its games and consumers, echoing concerns that unregulated event-contract exchanges could create the kind of exposure sportsbooks are required to manage under state licensing regimes — things like bet monitoring, integrity fees, and league data-sharing agreements.
Perhaps the most striking comment came from former Senator Chris Dodd, the namesake behind the Dodd-Frank Act that governs the CFTC’s authority. Dodd wrote that the proposed rule contradicts the law’s original intent, calling the rise of sports-wagering event contracts “the type of rampant speculation we sought to prohibit with the Dodd-Frank bill.” He added that “we did not amend the Commodity Exchange Act to override the established system for states to develop their own policies and laws regulating gaming.” Coming from the person whose name is on the underlying statute, that’s about as direct a rebuke as regulatory comment letters get.
Industry Split on the Framework
Not every commenter wants the rule killed outright. Industry groups, DraftKings, and several prediction market operators generally supported the broader CFTC framework but pushed for changes to key definitions — particularly around what qualifies as “gaming” versus a standard financial derivative. That distinction matters enormously for platforms like Kalshi and Polymarket, which have leaned on the argument that sports contracts are legitimate commodity-style products rather than disguised sportsbook wagers.
The timing adds another layer. Kalshi recently notched a win in Minnesota while facing a setback in New York, and Fanatics has moved to acquire a prediction market exchange — all signs that operators are positioning for whatever framework eventually emerges, regardless of how contentious the comment period turned out to be.
What Happens Next
The CFTC is not required to act on any specific timeline now that the comment window has closed, and the agency’s Division of Market Oversight had already warned exchanges days before the deadline not to submit broad, template-style self-certifications covering large groups of event contracts — a sign regulators are watching closely for attempts to route around the review process. With state attorneys general, a major professional sports league, and a former U.S. senator all telling the commission it’s misreading its own authority, the CFTC faces pressure from multiple directions as it decides whether to revise the proposal or push forward largely as written.
For bettors following the prediction market boom, the outcome will shape whether sports-related event contracts continue expanding as a parallel product to traditional sportsbooks or get pulled back under stricter federal review. Anyone comparing how prediction markets stack up against traditional sports betting platforms should expect that comparison to keep shifting as the regulatory picture comes into focus. In the meantime, platforms like Kalshi continue operating under their existing self-certification processes while the CFTC weighs its next move.