Atlantic City Casinos Urge CFTC to Block Sports Prediction Markets

Atlantic City’s casino industry has formally asked the U.S. Commodity Futures Trading Commission to block federally regulated prediction markets from offering sports-related contracts, arguing the practice violates state gambling laws. The Casino Association of New Jersey, which represents the city’s nine casinos, submitted comments to the CFTC on Monday as the agency weighs rules for the fast-growing market in event-based “contracts.”

The association specifically asked the commission to stop companies like Kalshi and Polymarket from accepting sports wagers, especially in states where traditional sports betting remains illegal. The filing adds another major voice to a mounting industry pushback against prediction markets, which have positioned themselves as federally regulated alternatives to state-licensed sportsbooks.

Casinos Say Billions in Tax Revenue Are at Stake

The dispute carries real financial weight for traditional operators, who pay millions of dollars annually in licensing fees, taxes, and regulatory costs to run their businesses under state-level oversight. The American Gaming Association, the industry’s national trade group, has estimated that prediction market companies have already cost states more than $1 billion in lost tax revenue by operating outside that framework.

Casino operators have also argued that prediction market platforms don’t offer the same player protections required of state-licensed gambling businesses, including responsible gambling safeguards and self-exclusion programs. Kalshi pushed back on that characterization in its own comments filed with the CFTC the same day, describing its industry as “federally regulated, fully collateralized, transparent, and subject to comprehensive surveillance.”

“The Commission should give substantial weight to the conclusion that sports event contracts advance the public interests articulated in [the Commodity Exchange Act] more squarely, not less, than many longstanding categories of futures and swaps,” Kalshi wrote in its filing.

FanDuel and the NFL Weigh In

The Casino Association isn’t the only stakeholder pressing the CFTC for changes. FanDuel, which offers both licensed sports betting and its own prediction market products, asked the commission for greater clarity on how its rules would apply to sporting events, while also backing closer monitoring and stronger consumer protection standards for prediction market wagers.

The NFL took an even harder line, telling the agency that its draft rules “fall significantly short of protecting the integrity of sporting events, and the fans who participate in these markets.” The league asked the CFTC to prohibit contracts tied to events that could be easily manipulated by a single person, along with restrictions on contracts linked to non-public information such as injury status and internal game plans.

A Legal Fight Playing Out State by State

States have increasingly turned to the courts in efforts to keep prediction market platforms from offering sports contracts, arguing the practice runs afoul of state gambling law — particularly in jurisdictions that haven’t legalized sports betting at all. New Jersey previously tried to block Kalshi from operating in the state but was turned back by a federal court ruling.

The broader legal fight traces back to New Jersey’s landmark 2018 Supreme Court win, which cleared the way for each state to decide individually whether to legalize sports betting — a decision more than two-thirds of states have since made. Derek Shaffer, an attorney representing the Casino Association, argued that the justices in that case “all agreed that states had the authority to ban or regulate sports betting,” and warned that a lack of federal enforcement against prediction market sports contracts would effectively legalize sports betting nationwide regardless of individual state policy.

“That would override the will of the people in states around the country, including California and Texas, which have considerable differences between them but have both chosen to ban sports betting,” Shaffer wrote. “It will also strike at the sovereign prerogatives of states and Indian Tribes that are relying on gaming revenue to fund essential public programs.”

Shaffer added that the CFTC would effectively be assuming the role of a national gambling regulator without authorization from states or tribal governments, arguing the agency is moving well beyond its expertise by wading into the complexities of gaming oversight. With the NFL, FanDuel, and now Atlantic City’s full casino industry all weighing in, the CFTC’s eventual rulemaking could reshape how Kalshi and similar prediction market platforms are allowed to operate alongside licensed sportsbooks going forward.