The CFTC recognizes its regulatory limitations, the brief notes, citing a 2024 Notice of Proposed Rulemaking that would have prohibited betting on political and sporting events. 

Commission regulations, the proposed rule said, are “focused on regulating financial instruments and markets, and do not include provisions aimed at protecting gambling specific risks and concerns inherent to gambling. …Gambling is a rapidly evolving field, and the Commission does not believe that it has the statutory mandate nor specialized experience to oversee it.” 

The proposed rule was withdrawn in January. 

“Nevada’s model works because of proximity — regulators, operators, and support systems are integrated,” says Delap. “Removing that structure weakens protections for consumers.”

Unlike casinos or sportsbooks “where the gambling nature of the activity is explicit — Kalshi downplays or omits warnings related to addiction, loss of control, or financial harm,” NCPG argues in its filing. “Instead, Kalshi famously portrays itself as intellectually rigorous, socially valuable, and skill based.” 

The filing contends that “Kalshi’s slick, easy to use platform mimics traditional gambling, meaning that the risk associated with the use of the platform is high.” Without safeguards, it asserts, “the use of Kalshi in the state of Nevada is a public health crisis waiting to happen.” 

Nevada gambling regulation for in-person and on-line wagering includes a number of safeguards, including age and identity verification, advertising standards, mechanisms for self-exclusion from play, and funding for problem gambling programs. Online operators are responsible for additional measures, including limits on deposits, bet amounts, and time playing. 

“These safeguards do not eliminate all risk. They manage it,” says the NPGC’s brief.  

Almost half of digital sports betting ads viewed in the U.S. this year are from prediction market platforms, which are not subject to responsible gambling advertising requirements that apply to state and tribal gambling operations. 

Kalshi is the most visible sports betting advertiser in the U.S., with about 5.2 billion digital ad impressions this year, according to research from the American Gaming Association. The second most prolific advertiser, Fan Duel, generated 2.9 billion impressions.

In January and February, nearly half of digital sports betting ads in the U.S. were for prediction platforms, and did not include responsible gaming messaging, as required by states. 

In addition to lacking safeguards, the brief notes a dearth of national policy dialogue amid the explosion of betting on prediction platforms. 

Gambling disorder, it notes, is “a clinical condition that can be diagnosed in individuals. Public health policy, by contrast, focuses on population-level exposure, accessibility, and environmental risk.” Public health policy examines not only “who develops a disorder, but how many people are exposed to risk, how frequently, and under what safeguards.”  

“Increased access, speed, and normalization of wagering-like products are associated with higher risk of harm at the population level,” says Delap of the NCPG.

Strange bedfellows?

Critics of the multi-state effort to rein in prediction platforms blame anticompetitive state and tribal licensees, some of which have been known to stray outside the regulatory boundaries they now seek to impose on the platforms. 

Consumer protection, prediction market advocates argue, is a priority for licensees only when faced with a new form of competition, such as tribal or internet gambling. 

“This isn’t about protecting consumers,” Kalshi CEO Tarek Mansour wrote on X this week of the effort to ban sports betting on prediction platforms. “It’s about protecting monopolies.” 

An analysis by the National Council on Problem Gambling found that on average, states with legal gambling met only 32 of its 82 recommended player protection standards. Nevada aligned with 24 of the NCPG’s standards, landing it in the bottom tier of compliance with ten other states. 

A University of Nevada Las Vegas Institute of Gaming study published last year found 15% of Nevada adults are defined as problem gamblers, meaning they’ve experienced harm from their gambling “many times” in the last year. The national average is 2%, according to the National Council. 

Yet, the state’s commitment to adequately funding problem gambling prevention and treatment has long been lacking.