Oklahoma AG urges agency to let states regulate sports prediction markets

OKLAHOMA CITY (KOKH) — Oklahoma Attorney General Gentner Drummond is pressing federal regulators to make clear that states — not the federal government — have authority over sports-related prediction markets, arguing the platforms function like sportsbooks without state oversight.

Drummond and 40 other state attorneys general filed a formal comment Thursday with the Commodity Futures Trading Commission, urging the agency to reaffirm that it does not have jurisdiction over sports-related contracts offered through prediction markets. The coalition said prediction markets have effectively become unregulated sportsbooks.

Prediction markets, including Kalshi and Polymarket, allow users to trade contracts tied to the outcome of future events. Drummond said sports-related contracts on those platforms amount to gambling and should be regulated by states.

“This is unequivocally gambling, which means it belongs under State authority,” Drummond said. “States have long had the right and responsibility to protect their own citizens from the dangers of gambling, and that should continue to hold true whether bets take place on a prediction market or inside a traditional casino.”

In their letter, the attorneys general said users can make the same types of wagers on prediction markets as they can at traditional sportsbooks. “Any distinction between sportsbook bets and prediction-market bets is illusory,” they wrote.

The coalition said prediction market users can wager on game winners, point spreads and player statistics, while bypassing consumer protections and tax requirements mandated by state gambling laws. The attorneys general argued the contracts are entertainment-based gambling rather than tools for financial risk management, placing them outside the CFTC’s jurisdiction.

The attorneys general also warned that sports gambling poses risks to public health and financial security.

They said states are best positioned to protect residents from those harms and asked the CFTC to confirm through rulemaking that it lacks jurisdiction over sports-related contracts, leaving states with the power to regulate or prohibit sports gambling.