Pryor Cashman Partner, Jeffrey Alberts, Co-Chair of the firm’s Financial Institutions and FinTech Practices, was quoted in a CBS MoneyWatch article discussing the battle between the federal government and a growing number of U.S. states over the regulation of prediction markets.

In the article, “Some states want to regulate prediction markets. Should the feds let them?”, Jeff discussed the legal ambiguity about whether the CFTC’s jurisdiction extends to sports betting. Commenting on the dangers of allowing individual states to apply their own rules to prediction markets he noted:

"We've often seen other countries where their fintech companies are able to beat ours, not because they're more innovative, but because we're kind of kneecapping our own industry by making them comply with 50 different regulators at the same time, which slows them down.”

Jeff also emphasized that the current Commodity Exchange Act (CEA) that as established in 1936 was not designed to address the idea that the platforms are breaking their laws by enabling illegal gambling, stating:

"Congress didn't explicitly say that the CEA somehow converted the CFTC into a national sports gambling regulator." "When you look at the purpose of the CEA, it's not to address things like addiction."

This article explores the escalating conflict between the federal government and individual states over who should regulate prediction markets. As the CFTC argues that federal law grants it exclusive authority to oversee these platforms, states maintain that prediction markets function as forms of gambling that fall under their jurisdiction. The dispute raises broader questions about financial regulation, sports betting oversight, consumer protection, and innovation in emerging markets. With ongoing lawsuits, growing industry influence, and competing interpretations of congressional intent, the issue may ultimately require clarification from Congress or a definitive ruling from the Supreme Court.

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