Atlantic City Casinos Urge CFTC to Ban Prediction Markets

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Tue Aug 04, 2026, 7:00 am ET

Read Time: 4 minutes

Atlantic City Casinos Urge CFTC to Ban Prediction Markets

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Atlantic City casino operators and the New Jersey Attorney General's Office have intensified their campaign against sports prediction markets. 

Both parties urged the U.S. Commodity Futures Trading Commission (CFTC) to prohibit sports-related event contracts offered by platforms like Kalshi and Polymarket.

Their comments came during the CFTC's ongoing rulemaking process for prediction markets. The filings argue that sports event contracts closely resemble traditional sports betting. Yet, they operate outside state gaming laws that govern licensed operators.

Casino representatives say the current framework creates an uneven playing field. They argue that prediction markets compete directly with US online sportsbooks while avoiding state licensing, taxation, and responsible gambling obligations.

The debate could shape the future of sports prediction markets across the United States. It may also determine whether federal regulators or individual states ultimately oversee these products.

Atlantic City Casinos and New Jersey Officials Challenge CFTC Authority

The Casino Association of New Jersey (CANJ), representing Atlantic City's casino industry, submitted comments urging the CFTC to reject sports-related event contracts. The New Jersey Attorney General's Office filed a separate comment supporting the same outcome.

Both filings argue that sports prediction contracts effectively function as sports wagers. However, they avoid the regulatory framework that licensed sportsbooks must follow under New Jersey gambling laws.

Casino operators contend that prediction markets do not obtain state gaming licenses or pay gaming taxes. They also argue these platforms operate without the same responsible gambling safeguards required of regulated sportsbooks.

According to the CANJ, the CFTC has changed its position while considering new prediction market regulations.

"Federal judges and members of Congress around the country have demanded explanations for this dereliction. The CFTC has answered merely that contracts that pay off based on sports outcomes are not 'gaming' contracts such that they are barred under current regulations. The Proposal, of course, now takes the opposite view," the CANJ comment letter declares.

The association maintains that Congress never intended the Commodity Exchange Act to authorize nationwide sports wagering through federally regulated derivatives markets.

The New Jersey Attorney General echoed those concerns. State officials argued that sports betting has traditionally remained under state jurisdiction. They also warned that allowing prediction markets to expand could undermine the regulatory systems developed after the repeal of PASPA.

NFL and Other Major Leagues also Seek Stricter Prediction Market Rules

Atlantic City's concerns mirror those raised by several major professional sports leagues.

Organizations including the NFL have urged the CFTC to strengthen oversight of sports-related event contracts. League officials argue that expanded prediction markets could create integrity risks if regulations remain unclear.

Professional leagues have generally supported legal sports betting when it operates under strict licensing and monitoring standards. However, they want similar safeguards applied to federally regulated prediction markets if those products continue to expand.

The leagues have also called for greater transparency regarding market surveillance, suspicious betting activity, and information sharing between operators and sports governing bodies.

Legal Battle Continues Over Who Should Regulate Prediction Markets

The dispute extends well beyond New Jersey.

Several states have challenged Kalshi's sports prediction markets through lawsuits and enforcement actions. States including New York, Washington, Nevada, Maryland, Ohio, and others argue that these products constitute unlicensed sports betting under state law.

New Jersey has also pursued a legislative response following its ongoing legal dispute with Kalshi. Earlier this year, a federal court prevented the state from enforcing its cease-and-desist order while litigation continues. 

That setback prompted state officials to pursue additional avenues through federal rulemaking and new legislation.

State Senate President Nicholas Scutari introduced SB S4447, which would classify sports-related event contracts as sports wagering under state law. The bill would require prediction market operators to obtain licenses from the New Jersey Division of Gaming Enforcement (DGE). 

It would also subject those operators to the state's 19.75% online sportsbook tax and an additional 10% investment alternative tax surcharge. Supporters say the measure would ensure prediction markets follow the same regulatory and tax framework as licensed sportsbooks.

CFTC rulemaking could determine future oversight

Kalshi continues to defend its business model. The company argues its contracts are federally regulated event derivatives governed by the Commodity Exchange Act rather than gambling products.

That position has received support from the CFTC in several ongoing legal disputes. The agency maintains that qualifying event contracts fall within its regulatory authority.

The resulting conflict has created a growing jurisdictional battle between federal and state regulators. Multiple federal courts are now considering whether the Commodity Exchange Act preempts state gambling laws when sports-related event contracts are involved.

The CFTC's final prediction market rules could significantly influence those cases. If the agency formally classifies sports event contracts as permissible derivatives, federal oversight may expand further. 

Conversely, stricter restrictions could reinforce state authority over sports wagering and preserve the existing regulatory framework governing US online sportsbooks.

For now, Atlantic City casinos and New Jersey officials hope the CFTC will prohibit sports-related event contracts before they become further entrenched in the regulated gaming landscape. 

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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