The Gambling Wire: CFTC Clarifies Sports Betting Rules, NBA Seeks Prediction Market Data

The CFTC seeks to distinguish sportsbook bets from event contracts. Meanwhile, the NBA calls for national regulatory consistency, in contrast to the NFL’s support for state oversight.

The Commodity Futures Trading Commission (CFTC) released two rulemakings on Friday, seeking to establish why a sports wager placed at a licensed sportsbook should be treated differently from a contract on the same outcome traded on a prediction market.

Meanwhile, NBA Commissioner Adam Silver called for access to prediction-market trading data to detect potential manipulation, while Kalshi cited the new CFTC rules in its latest court challenge. Elsewhere, New York and Wyoming moved forward with proposals to tighten gambling regulations.

The Big Story: CFTC Draws Line Between Sportsbook Bets and Prediction Market Contracts

The rules, which the CFTC sent to the White House for review on Sept. 28, establish separate regulatory treatment for traditional gambling products and exchange-traded event contracts.

An interim final rule excludes casino-style gambling products offered under state or tribal law, provided they are not traded on an organized exchange. A separate proposal would explicitly include event contracts tied to sports, politics, culture, and weather in the definition of a swap.

The agency’s reasoning centers on how the products work. Sportsbooks generally set the odds and take the opposite side of customers’ wagers. By contrast, prices on prediction markets are determined through trading between participants.

The CFTC’s rules seek to address concerns raised by some courts that treating sports event contracts as derivatives could bring traditional sportsbook wagers under federal oversight.

The interim rule takes effect upon publication in the Federal Register, while the event-contract proposal remains open for consideration. Both have 30-day public comment periods following publication.

The Daily Wire

NBA Commissioner Wants Access to Prediction Market Trading Data

NBA Commissioner Adam Silver wants access to prediction-market trading data to detect insider trading and manipulation, CNBC reported.

Silver questioned markets tied to coaching dismissals and supported a minimum trading age of 21. Unlike the NFL, which urged the Supreme Court to preserve state authority over sports betting, Silver favored national regulatory consistency.

“Frankly, from at least the NBA standpoint, we have roughly 40 different jurisdictions regulating us right now. So to have a consistent policy nationally, I think would be in our best interest,” he said.

This is not the first time the NBA has called for data sharing. The league previously urged the CFTC to require mandatory data sharing, more robust consumer protection tools, an age limit of 21, and a greater role for leagues in determining which contracts can be offered.

The NBA and NFL remain without announced prediction-market partnerships, while MLB, the NHL and MLS have reached agreements with operators. MLB has also signed a memorandum of understanding with the CFTC on integrity protections.

Kalshi Cites New CFTC Rules in Sixth Circuit Rehearing Request

Kalshi immediately cited the CFTC’s new rulemakings in its petition to the Sixth Circuit seeking reconsideration of its September ruling in favor of Tennessee and Ohio.

The company filed the petition on Oct. 9, the final day of the 14-day filing window, which was also the day the CFTC issued the rules. The company argues that the new regulatory measures reinforce the distinction between traditional sportsbook wagers and exchange-traded event contracts.

Kalshi also maintains that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over derivatives traded on federally regulated exchanges, preempting state gambling restrictions.

The company is seeking reconsideration by the original panel or the full Sixth Circuit.

New Jersey Casino Association Joins Supreme Court Fight Against Kalshi

The Casino Association of New Jersey is the latest organization to file an amicus brief urging the Supreme Court to review the Third Circuit’s ruling in favor of Kalshi against New Jersey officials.

The association argues that Kalshi’s sports event contracts are effectively traditional sports bets, regardless of whether they are traded on a federally regulated exchange. It also challenges the CFTC’s ability to regulate sports gambling. The association cites the agency’s limited resources and its lack of experience in traditional gaming oversight.

The filing adds to briefs from the NFL, the American Gaming Association, state attorneys general, former federal lawmakers, anti-gambling organizations, and Tribal gaming interests, all urging the Supreme Court to intervene.

Kalshi Investigates Suspicious Trades Connected to White House Appointment

Kalshi is investigating suspicious trades that correctly anticipated President Donald Trump’s selection of Katie Zacharia as White House press secretary, according to The Wall Street Journal.

At least three trades totaling approximately $173 were placed shortly before news organizations reported the appointment. The positions were expected to return roughly $9,600 combined. The Journal’s review of the market data indicates that Zacharia had a 1% probability of receiving the position before the trades.

The timing has raised questions about whether traders had access to nonpublic information. Kalshi confirmed the investigation to the Journal, but no wrongdoing has been established.

New York Proposes AI Betting Restrictions and Problem Gambling Safeguards

The New York State Gaming Commission advanced two proposed rulemakings on Friday aimed at restricting AI-driven gambling promotions and strengthening protections for at-risk sports bettors.

The first would prohibit gambling operators from using AI, machine learning and other automated systems to personalize promotions, bonuses, odds or wager recommendations based on customer data, with a limited exception for horse racing.

The second would require mobile sportsbooks to identify at-risk bettors and implement escalating interventions, including responsible gambling education and direct outreach. It would also prohibit marketing to those customers and limit withdrawal cancellations

The action follows recent scrutiny of DraftKings’ marketing practices. Regulators in Maine, Michigan and Massachusetts have also begun reviewing AI sportsbook practices.

Wyoming Lawmakers Back Sweepstakes Casino Ban

Wyoming lawmakers on the Select Committee on Gaming unanimously voted to sponsor draft legislation for the 2027 session that would prohibit online sweepstakes casinos.

The proposal would expand the definition of professional gambling to include operating online casino or sweepstakes games and knowingly providing related services, including payment processing, geolocation, platform hosting and advertising.

It also defines “representative of value” to cover single- and dual-currency systems, free-play credits and other promotional currencies that can be redeemed or used for a chance to win prizes.

The proposed ban would take effect on July 1, 2027, if enacted

Kalshi Introduces Protected NFL Player Markets

Kalshi has introduced injury-style protection for certain NFL player markets, similar to features offered by traditional sportsbooks.

The exchange would not refund affected wagers but would settle qualifying contracts at a pregame fair price. That could reduce losses, but traders could still lose some of their stake.

The feature is available only through Kalshi’s mobile Combo Builder and must be chosen before kickoff. Standard markets are not covered. Protection applies when a player participates in the first half but does not return after halftime without reaching the specified target.

DraftKings’ Texas State Fair Sponsorship Draws Backlash

DraftKings sponsored free parking at the State Fair of Texas on Oct. 9, covering the usual $25 charge at official parking lots.

The promotion brought the gambling operator’s branding to one of Texas’ largest public events, despite sports betting being illegal in the state. The company also operates its prediction market product in Texas.

The campaign drew instant backlash, including an Oct. 10 letter from Stop Predatory Gambling and four Texas-based organizations urging the State Fair to terminate the sponsorship.

The groups argued that promoting a “predatory gambling operator” like DraftKings at a family-oriented event risks normalizing gambling among children and young adults.

Brazil Appeals Court Reverses Stake’s Temporary Operating Reprieve

A Brazilian federal appeals court has overturned a temporary injunction allowing Stake to continue operating despite the country’s new ban on online gambling.

Just a day before, a federal judge in São Paulo authorized Stake to continue operating until Oct. 25, subject to restrictions, after the company challenged the provisional measure. However, the Third Regional Federal Court suspended that authorization on Friday following an appeal by the federal government.

The measure remains in effect pending congressional consideration, while industry associations and other stakeholders continue to challenge the restrictions in court.

Developments to Watch This Week

Prediction-market litigation remains in focus following Friday’s CFTC rulemakings. Operators, as well as the agency itself, are likely to use the new rules to strengthen their arguments in ongoing cases, as Kalshi did in the Sixth Circuit.

The deadline for amicus briefs in New Jersey’s petition to the Supreme Court falls on Oct. 15, so the case could draw additional filings following last week’s wave. Other deadlines include a pretrial conference in the CFTC’s lawsuit against Minnesota, which is scheduled for Tuesday. The regulator also faces a Friday filing deadline in CME’s challenge involving perpetual futures.

Several major rulings remain outstanding and could be issued at any point. These include Kalshi’s fights with Massachusetts and Maryland. Arizona is also awaiting a response from the Ninth Circuit to its request for summary judgment vacating the district court’s preliminary injunction issued in May.

Prediction markets and tribal sovereignty will also be part of discussions at legal events at UC Berkeley on Tuesday and UNLV on Friday. Meanwhile, trading volumes remain worth monitoring following several record-setting NFL weekends.

Outside prediction markets, Pennsylvania’s deadline to remove unauthorized skill-game machines expires Tuesday, with enforcement set to begin Wednesday. It’s worth watching whether the state’s Supreme Court will issue an extension.

Featured Image: ajay_suresh via Wikimedia Commons (license)

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