Popular prediction markets platforms recently announced that they have formed the Coalition for Prediction Markets. According to the coalition’s website, it aims to unite exchanges, brokers, and advocates to expand consumer access to safe, transparent, and integrity-driven prediction markets in the U.S. The coalition contends that prediction markets currently operate under a federal framework, but that framework is being threatened by state regulators “seeking to block consumer access and extend their own authority.” This messaging signals that prediction market operators are prepared to vigorously oppose state regulation in an effort to preserve exclusive federal oversight.
The Washington, D.C.-based coalition lists several policy priorities on its website, including federal clarity and consistency, market integrity and transparency, consumer access and education, and responsible innovation. The coalition’s policy priorities suggest that state interference is amongst its greatest concerns. The coalition contends that state gaming regulators’ attempts to impose gambling-style oversight on federally supervised prediction markets threatens to cause confusion and undermine the existing federal framework governing prediction markets. The announcement of the coalition comes on the heels of heightened scrutiny from state regulators, some of which have taken the position that prediction markets are subject to state gaming regulations. Given the coalition’s stated objectives and growing regulatory scrutiny, prediction market stakeholders should keep an eye on how its activities influence emerging rules and policy debates.