Atlantic City Casinos Ask Federal Government to Ban Prediction Market Sports Contracts

The Casino Association of New Jersey has formally asked the federal government to prohibit prediction markets like Kalshi and Polymarket from offering bets on sporting events, arguing that the practice violates state gambling laws. The group submitted its comments Monday to the U.S. Commodity Futures Trading Commission, which is currently weighing how to regulate the rapidly growing market for event-based “contracts.”

The request from Atlantic City’s casino industry adds another voice to a broader fight that has been building in Washington all year, as gaming operators, state regulators, and prediction market companies clash over who has the authority to police sports-related wagers.

New Jersey’s Uphill Legal Battle

New Jersey has already tried to shut Kalshi out on its own, filing an effort to bar the company from operating in the state. That attempt was rebuffed by a federal court, which sided with Kalshi’s position that its sports contracts fall under CFTC jurisdiction as regulated swaps rather than state-licensed sports betting. The ruling was a significant setback for New Jersey regulators and mirrors similar outcomes in other states that have tried to challenge prediction markets directly.

The irony is not lost on industry observers: New Jersey’s own landmark 2018 Supreme Court win in Murphy v. NCAA is what cleared the way for all 50 states to legalize sports betting in the first place. More than two-thirds of states have since done so, building a multibillion-dollar regulated industry that casino operators argue prediction markets are now sidestepping without the same licensing, tax, and consumer protection requirements.

A Widening Fight in Washington

The Casino Association of New Jersey’s comments to the CFTC are the latest move in an intensifying lobbying battle between the casino and gaming sector and prediction market operators. Congress has seen a flurry of bills introduced this year targeting event contracts on sports, elections, and other outcomes, including a bipartisan Senate proposal from Sen. Adam Schiff and Sen. John Curtis that would prohibit sports prediction market contracts outright and bar casino-style games such as virtual poker, slots, and blackjack from these platforms.

Kalshi has pushed back forcefully against that framing, arguing that banning sports contracts on regulated platforms would simply push the activity offshore into unregulated markets. The company has also characterized casino industry opposition as an attempt to protect an existing monopoly rather than a genuine consumer protection concern, noting that its markets operate without a “house” that limits winning customers.

Sports-related contracts make up the largest single category of activity on both Kalshi and Polymarket, which is part of why the casino industry has zeroed in on that segment specifically rather than opposing prediction markets across the board. With a divided Congress unlikely to pass standalone prediction market legislation before the November elections, both sides are increasingly focused on regulatory bodies like the CFTC and the possibility that restrictive language could be attached to a broader end-of-year legislative package.

What It Means for Bettors

For now, prediction markets remain available to bettors in states where traditional sports betting is legal and in several where it is not, a distinction that has made platforms like Kalshi popular with users in states that haven’t authorized regulated sportsbooks. Whether the CFTC ultimately sides with casino interests or allows sports contracts to continue operating under swaps regulation will shape how much longer that gap in market access persists.