Gaming Lobby Files to Join CFTC Lawsuit While Seeking Congressional Ban on Event Contracts

State attorneys general from 41 jurisdictions and multiple gaming commissions urged the CFTC to relinquish jurisdiction over event contracts, aligning with the American Gaming Association's multi-state litigation and cease-and-desist campaign. North Carolina enacted legislation in 2024 that recognizes federal CFTC oversight and imposes a tax on prediction-market revenue, diverging from the zero-sum approach taken by casino-dependent states. The documented record shows the AGA previously secured state-level restrictions on online platforms; the current filings repeat the same jurisdictional claims without new consumer-harm data beyond existing sports-book complaints.

A Philadelphia suit filed by Terry Thompson against FanDuel documents personalized celebrity inducements tied to $18.5 million in wagers, illustrating the sportsbook model that profits only from sustained customer losses. Prediction-market exchanges such as Kalshi and Nadex collect transaction fees regardless of outcome and have requested additional CFTC rule clarity rather than exemption. This structural difference alters the incentive for platforms to intervene on problem gambling without direct revenue penalty.

The regulatory contest now centers on whether CFTC authority preempts state gaming statutes for non-gaming event contracts. Primary filings show the AGA requesting an outright statutory ban while simultaneously arguing that existing state laws already cover these products. If federal courts uphold CFTC jurisdiction, states lose both enforcement leverage and tax revenue streams currently claimed by lotteries and casinos.

Next steps include House and Senate committee markups on any ban language and the CFTC's response to the Wisconsin intervention motion, expected before the end of the 2024 calendar year.