Utah Governor Defends State’s Rights to Regulate Prediction Markets

Utah Governor Spencer Cox has responded to an amicus brief filed by the Commodity Futures Trading Commission (CFTC) as it defends its right to control prediction markets, which are currently facing lawsuits and backlash from states. 

In a Wall Street Journal op-ed, CFTC Chairman Selig stated that the CFTC, not states, could determine whether prediction markets constitute gambling. He added that the commission would step in to defend the platforms against nearly 50 lawsuits filed against prediction market apps.

Following the statement, Utah Governor Cox took to social media to criticize the CFTC’s plans to step in against states that are trying to pass laws and regulations for prediction market operations. 

“Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds. Let me be clear, I will use every resource within my disposal as governor of the sovereign state of Utah, and under the Constitution of the United States to beat you in court,” he said. 

Currently, all types of gambling are banned under Utah state law, meaning residents cannot access the best sportsbooks or online casinos. However, the introduction of prediction markets and later sports-event contracts has given residents access to wager on event outcomes.

Despite prediction markets arguing that they are not gambling but financial futures tools, critics have argued that there is little difference between their event contracts and those of sportsbooks in terms of societal impacts. 

While CNBC was unable to confirm whether the amicus brief had been filed, Selig stated that it would be filed with the Ninth Circuit Court of Appeals to support Crypto.com in its Nevada Gaming Control Board dispute. 

NBA monitors prediction markets 

As the CFTC continues to defend prediction markets, the NBA has stated that it will continue to treat the platforms in the same way it treats traditional sports books, adding to a number of sports leagues that are monitoring the space or partnering with the operator. 

Speaking at a Los Angeles press conference during the All-Star Weekend, NBA Commissioner Adam Silver said he currently sees no difference between traditional betting and prediction markets. 

“We currently are looking at prediction markets essentially in the same way that we’re looking at sports betting markets or sports betting companies. It’s rapidly evolving. Prediction markets have now come on the scene fairly recently as, I don’t know how else to say it, major sports betting marketplaces. Whether prediction markets are allowed to go forward in the form they’re in now will, I think, be ultimately an issue for the courts and for Congress,” he said. 

It follows several sportsbooks, such as DraftKings and FanDuel, launching their own prediction markets after seeing the success of Kalshi and Polymarket, with Fanatics CEO Matt King noting a distinction between sportsbooks and prediction markets. 

Silver's comments also follow Milwaukee Bucks player Giannis Antetokounmpo announcing he had become a shareholder in Kalshi, which falls under the 1% cap on player investments in betting companies.