Two Nevada senators have joined the growing disputes over the future of prediction markets. Democratic Sens. Jacky Rosen and Catherine Cortez Masto have sided with state regulators who claim that the rapidly growing sector is circumventing longstanding gambling laws. The two have joined a group of lawmakers urging a key Senate appropriations panel to rein in the Commodity Futures Trading Commission (CFTC).
Nevada Has Taken an Especially Aggressive Stance
Rosen and Masto are asking that the CFTC be prohibited from using federal funds to sue states and tribes that are attempting to regulate or shut down prediction platforms. Companies like Kalshi and Polymarket have long insisted that their products are “event contracts.” However, many state officials see prediction markets as unlicensed gambling.
Recent lawsuits filed by the CFTC against states regulating online prediction markets will only fuel a gambling public health crisis.
Sens. Jacky Rosen and Catherine Cortez Masto
This dispute boils down to who gets to regulate this emerging sector. Nevada regulators have been among the most aggressive, ordering several prediction companies to cease operations in Nevada. When that failed, the Nevada Gaming Control Board took legal action. Since then, state courts have imposed restrictions, including preliminary injunctions aiming to shut down the platforms.
According to Nevada regulators, prediction market contracts more closely resemble sports betting rather than financial hedging. These companies operate without local licenses, do not pay gambling taxes, and often lack basic safeguards such as age verification. The state also argues that permitting such platforms to run unchecked erodes a carefully regulated system that Nevada has perfected for decades.
The CFTC Firmly Sides with Prediction Markets
Rosen and Masto caution that federal intervention could make things worse. In a late June letter, they argued that recent lawsuits filed by the CFTC against states trying to enforce their gambling laws risked fueling addiction and exposing underage users to betting products. They also accused the agency of overstepping its powers and infringing on authority that traditionally belonged to states and tribal nations.
As prediction markets have sought to circumvent state safeguards, their products have led to underage gambling, gambling addiction, and serious financial losses.
Sens. Jacky Rosen and Catherine Cortez Masto
Federal pressure has only increased after recent policy changes. Under the current administration, the CFTC has paused its efforts to scrutinize or restrict prediction markets. Investigations have been dropped, and proposals to limit certain types of contracts have stalled. While industry supporters view this stance as a win for innovation, critics warn that prediction platforms now lack meaningful oversight.
Certain prediction companies also enjoy high-profile political ties, as Donald Trump Jr. has taken on advisory roles and financial stakes within the sector. Tribal leaders have also entered the fray, filing lawsuits and warning that prediction markets threaten tribal sovereignty and existing gaming compacts. With such contrasting opinions, it may be up to the Supreme Court to render final judgment.