The federal government typically left gambling to the states — until the prediction markets
Federal regulators are shifting gambling authority from states to the federal level by classifying prediction markets as investment platforms.Summary
Historically, the U.S. federal government has deferred gambling regulation to individual states, intervening only to protect state interests or curb interstate illegal schemes. However, this precedent is being reversed by the Commodity Futures Trading Commission (CFTC). By classifying prediction markets like Polymarket and Kalshi as investment platforms rather than gambling sites, the CFTC has effectively bypassed state and tribal gaming laws.
This regulatory shift allows prediction markets to operate in all 50 states, regardless of local gambling restrictions, and permits users as young as 18 to participate, even in states where the legal gambling age is 21. While the Supreme Court previously limited federal interference in sports betting via the Tenth Amendment, the current CFTC approach creates a nationalized system of de facto gambling through regulation rather than direct legislation.
(Source：Headtopics)