Lotteries Call Sports Prediction Markets Hidden Gambling

The organization representing North America’s lotteries has told regulators that sports prediction markets are gambling dressed up as finance. In a submission tied to a US House Agriculture subcommittee discussion, the North American Association of State and Provincial Lotteries (NASPL) urged officials to classify sports event contracts as gambling rather than financial products. Its central line was blunt: that the distinction between a prediction and a wager is largely semantic.

Who is Making the Argument

NASPL speaks for 53 lottery organizations across the United States and Canada, the government-authorized operators that already run heavily regulated betting products and channel proceeds to public programs. That gives the intervention weight. These aren’t anti-gambling campaigners, but incumbent operators arguing that a competing category is playing by looser rules while offering what amounts to the same thing.

The submission cited three concerns. Consumer protection came first, on the argument that event contracts are made available to the public without the safeguards imposed on licensed betting. Sports integrity followed, given the obvious incentives that markets on game outcomes create. Finally, public funding closed the list: lotteries fund schools and services, and money flowing into prediction markets instead of regulated channels takes resources away from these areas that are most in need.

Prediction Markets: Financial Product or Wager

The fight turns on classification. Sports prediction markets are currently structured as event contracts under federal commodities oversight, which lets them operate nationwide outside state gambling frameworks. NASPL’s position is that calling a stake on a game a “contract” does not change what it is, and that the label is being used to sidestep the licensing, tax and responsible gambling rules that apply to everyone else offering to take a bet.

That semantic gap is exactly what the operators exploiting it depend on. Treating the contracts as financial instruments keeps them clear of state regulators and inside a federal structure built for commodities trading, not sportsbooks.

Adding to the Regulatory Pile-On

The lotteries join a growing line of challengers. Already, state regulators have moved against operators, lawmakers have floated bills to constrain the category, and courts have weighed in through cases like the recent Kalshi Arizona injunction. What NASPL adds is a large, organized bloc of established operators with a direct financial stake and a clean framing for regulators to seize on.

By tying its argument to the House Agriculture subcommittee, which oversees the commodities regulator at the center of the fight, NASPL aimed the message squarely at the venue that can act on it. Fifty-three lottery organizations telling Congress that prediction markets are gambling in all but name is a hard message for regulators weighing the sector’s future to wave off.