Prediction markets must not override state gambling laws Opinion
American Gaming Association CEO Bill Miller writes that prediction market platforms offer gambling products and should be regulated as such.
. If it looks like a bet, acts like a bet, and carries the same risks as a bet, then it should be regulated as gambling. In Iowa, that means it must answer to state law.
Bill Miller Guest columnist 
- Bill Miller is the president and CEO of the American Gaming Association.
For years, Iowa has taken a thoughtful, responsible approach to gambling regulation. From brick-and-mortar casinos to the more recent legalization of sports betting, the state has developed a framework that balances consumer access with public accountability. Iowa’s laws are clear: legal gambling requires licensure, transparency, and a commitment to responsibility.
That framework is now under threat from a new wave of so-called “prediction market” platforms, which are federally registered exchanges under the Commodity Futures Trading Commission (CFTC). But make no mistake: many of these platforms offer gambling products, not financial ones.
Prediction markets are now allowing users to bet on the outcomes of real-world events, including sports contests. That may sound like finance, but in practice, it’s sports betting by another name. If someone wagers on whether the Cubs will win their division, that’s a bet — not an investment. Calling it a “contract” or a “derivative” doesn’t change the core activity.
Just as concerning is who’s being asked to regulate this activity. The CFTC wasn’t created to govern gambling. It was created to safeguard the interests of agricultural producers and manage commodity risk, not authorize new forms of unregulated wagering. As former CFTC Chair Heath Tarbert once said, “America’s farmers and ranchers are at the heart of the real economy and the markets we regulate.” And when the CFTC rejected election betting contracts last year, former Chair Rostin Behnam acknowledged that approving such products would take the CFTC “well outside of its traditional areas of responsibility.” By expanding its oversight into prediction markets, the CFTC is drifting from its agricultural focus — undermining state gambling laws in the process.
More: Online sports betting is a fast lane to gambling addictionNeed a break? Play the USA TODAY Daily Crossword Puzzle.Moreover, these prediction market operators bypass the rules that protect Iowans. Since Iowa legalized sports wagering in 2019, the state has implemented comprehensive consumer protections: minimum age requirements of 21, identity verification, strict responsible gaming standards, extensive background checks for operators, and collaboration with professional leagues to detect suspicious activity. Legal sports betting has generated more than $59.9 million in sports betting tax revenue since launching, with funds supporting essential state initiatives including the Rebuild Iowa Infrastructure Fund, Iowa Skilled Worker & Job Creation Fund, Water Quality Infrastructure Fund, workforce development, and treatment programs for problem gaming.
Prediction market platforms ignore these essential safeguards. They aren’t licensed by the Iowa Racing and Gaming Commission and they aren’t bound by Iowa’s responsible gaming rules or prevention programs. Even more concerning, they aggressively promote their services without the important and required disclosures of licensed operators. Lastly, they don’t contribute a dime to Iowa’s communities in the form of gaming taxes.
These platforms, offering sports event contracts freely under an overly permissive “self-certification” process through the CFTC, threaten both consumers and the integrity of the broader gaming ecosystem. This isn’t responsible innovation, it’s a clear attempt to skirt state gambling laws. Without strong guardrails, consumers are exposed to risks, the integrity of sports is threatened, and public trust erodes.
More: Editorial: Don’t throw the book at Iowa athletes accused of illicit sports bettingThe CFTC plays a critical role in overseeing complex financial instruments, but it is not equipped to regulate gambling products directed at everyday consumers. That’s a job for Iowa’s state regulators, who know their communities, understand the risks, and have demonstrated success in regulating legal gaming operators.
State and tribal sovereignty for gaming regulation is clear, and the U.S. Supreme Court affirmed this in its 2018 Murphy v. NCAA decision. Just last month, 34 state attorneys general, including Iowa Attorney General Brenna Bird, filed an amicus brief in the U.S. Court of Appeals for the 3rd Circuit, supporting New Jersey in its litigation against prediction market platforms and to defend states’ authority to regulate sports betting.
The CFTC should respect these boundaries. Let Iowa — and every state — decide how to manage gambling activity. Innovation is welcome, but it must exist within a legal framework that puts consumers first. The CFTC’s mission is to support farmers, ranchers, and commodity markets, not to oversee gambling products dressed up as financial instruments. If it looks like a bet, acts like a bet, and carries the same risks as a bet, then it should be regulated as gambling. In Iowa, that means it must answer to state law, not circumvent it through a federal agency straying from its agriculture mandate.
Bill Miller is the president and CEO of the American Gaming Association.
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