The ongoing debate regarding prediction markets in the United States has been recently joined by one of North America’s largest lottery organizations.
A Matter of Semantics
The North American Association of State and Provincial Lotteries (NASPL) has issued a statement asking lawmakers and regulators to clarify the way they should tackle sports-related event contracts.
According to the NASPL, which stands for 53 lottery organizations in the US and Canada, products that are currently marketed as prediction markets are, in practice, a new form of gambling.
The organization strengthened its claim by saying that the distinction between a prediction and a wager is largely semantic when money is at stake.
“If individuals stand to gain or lose something of value based on the outcome of a future event, then that activity meets the definition of gambling under many established legal standards,” the NASPL explained.
Clear Warning
The association also made sure to warn about the severe consequences of allowing prediction markets to expand while still lacking clear oversight.
As always, threats to sports integrity, weakened consumer protection measures, and reduced funding for public programs supported by regulated gaming were among the main issues raised by the NASPL.
In support of its stance, NASPL also endorsed a recent paper published by the World Lottery Association, which argued that prediction markets are blurring long-established boundaries between regulated gambling and financial products.
The paper stated that sports, political, and other event-based contracts should be considered and accordingly treated as wagers, no matter how operators choose to call or describe them.
The report also called on worldwide governments to set clear rules for companies that offer these products.
Also recently, members of the House Agriculture Committee’s Subcommittee on Commodity Markets, Digital Assets, and Rural Development in Washington heard testimony on whether sports event contracts should remain under existing federal oversight or be subject to new regulations.
The outcome of that debate could have major implications for the future of prediction markets in the United States.