Regulatory tensions across the US gambling sector are intensifying, as federal intervention, state level reform and legal challenges continue to reshape the market landscape.
The Commodity Futures Trading Commission (CFTC) has taken a decisive step by filing lawsuits against Arizona, Connecticut and Illinois, challenging attempts to restrict prediction market activity at state level. The regulator argues that such products fall under federal jurisdiction, marking a significant escalation in the growing conflict between state lawmakers and federal oversight.
The legal action comes as Kalshi secured a key victory in New Jersey, where a federal appeals court ruled that state regulators cannot block its sports event contracts. The decision reinforces the position that such products may be classified as financial instruments rather than traditional betting.
At state level, regulatory approaches continue to diverge. In Wisconsin, Governor Tony Evers has approved legislation establishing a framework for online sports betting under a tribal led model. The structure requires all wagering activity to be processed via servers on tribal land, with rollout dependent on renegotiated compacts with the state’s 11 federally recognised tribes.
In Kentucky, lawmakers approved reforms to tighten market controls, including raising the legal betting age and restricting certain bet types. In a notable shift, separate measures propose taxing prediction market operators rather than prohibiting them, signalling a potential alternative regulatory approach.
In contrast, Ohio is considering proposals that would significantly restrict online betting, including limits on staking, wager frequency and promotional activity. With the majority of market handle generated online, the measures have raised concerns over their potential impact on operator viability.
Regulatory enforcement is also increasing. The Michigan Gaming Control Board has issued 45 cease and desist orders targeting unlicensed operators, underlining a more aggressive stance against offshore competition. At the same time, commercial activity continues to evolve. The NBA has signed a multi-year partnership with PrizePicks, highlighting ongoing alignment between major sports leagues and alternative gaming formats.
Taken together, these developments point to a US market increasingly defined by regulatory fragmentation. Federal and state authorities remain at odds over jurisdiction, while operators navigate a complex and shifting landscape that continues to test the balance between expansion and control.
