Nevada lawmakers introduce bill to ban sports event contracts
Nevada Congressmen Steven Horsford and Mark Amodei have introduced the bipartisan Prediction Markets Are Gambling Act, which would prohibit federally regulated prediction market platforms from offering sports betting and casino-style event contracts.
The bill would preserve prediction markets tied to financial, economic, and weather-related events while preventing Commodity Futures Trading Commission (CFTC)-regulated platforms from offering products that lawmakers say resemble traditional sports betting.
This bill resembles legislation that was introduced by Sen. Adam Schiff (D-CA), Sen. John Curtis (R-UT), and Sen. Catherine Cortez Masto (D-NV). The bill seeks to ensure that states and tribes retain jurisdiction over gambling while ensuring that sports betting is governed by state gambling laws.
Key provisions of proposed bill
The Prediction Markets Are Gambling Act proposes legislation to remove uncertainty from sports-related event contracts. Rather than disrupting the entire commodities market, it concentrates on contracts similar to sports betting or casino gambling.
In essence, the core of the bill states that no matter where the sports betting takes place, it should be regarded as gambling. From the perspective of politicians, whether the money goes through a sportsbook or the federal financial market exchange, there is no difference between the risks and payments involved. The bill would bar CFTC-registered exchanges from listing or facilitating sports and casino-style contracts altogether, closing the door on trading platforms marketing themselves as a backdoor into sports betting.
The measure protects all of the CFTC’s jurisdictional rights in this area, implying that regulators should continue to focus on genuine risk-management methods rather than disguised sports bets. The law maintains the CFTC’s authority over these instruments, thus instructing regulators to focus on legitimate commercial risk-management tools rather than sports wagers disguised as futures.
The legislation also reinforces that federal commodities law is not meant to override state and tribal gambling regulations. Gambling oversight has traditionally been a state and tribal matter, and this bill makes clear that nothing here changes that balance of power.
State authority and Nevada’s role
State governments believe that gambling regulation is important because the Professional and Amateur Sports Protection Act (PASPA) was lifted in 2018, allowing them to expand gambling in a way tailored to their local conditions through licensed and taxed sports betting.
Sports betting organisations must meet a number of requirements, including background checks, money supply, anti-money laundering, and consumer protection, among others. Prediction market companies, on the other hand, are able to avoid the majority of the requirements listed above due to federal legislation that governs them. This scenario causes injustice, among other difficulties.
Nevada has played a prominent role in this discussion. With a long-standing gambling framework and a large workforce dedicated to casinos, sportsbooks, and allied industries, the state sees prediction markets as a direct threat to its system.
Lawmakers are concerned that the use of federally regulated platforms that provide contracts for sporting events without regard for state responsibilities will result in job and revenue losses. Nevada courts have previously prohibited some prediction market operations, reinforcing the notion that contracts for sporting events fall under the scope of gambling legislation.
Gaming is one of the biggest contributors to Nevada’s economy, employing tens of thousands of people in casinos, bookmakers, hotels, restaurants, entertainment, technology, and regulation. Lawmakers claim that protecting licensed operators would also protect their employees.
Taxation is another major issue. Regulated sportsbooks pay significant taxes and fees to the government to support education, healthcare, infrastructure, and problem gambling programmes. People may shift from legal sportsbooks to prediction markets, which do not pay taxes, resulting in an inevitable loss of revenue despite strong demand.
Closing regulatory loophole
Lawmakers describe prediction markets as exploiting a loophole by using federal commodity rules to offer products that function like sports betting while avoiding state gambling laws. They argue this was never the purpose of commodity exchanges.
The proposal addresses this issue by barring sports and casino-like contracts on federal exchanges, preserving valid business event contracts, defining state and tribal jurisdictions, and resolving the matter through legislation rather than years of regulatory process. It is believed that such a step reduces ambiguity and eliminates costly years of court battles.
It is unclear whether the bill will become law, but bipartisan support in both congressional chambers suggests that concerns about sports prediction markets will remain for some time. Even if this measure is not passed, it will have an impact on future discussions about how to regulate prediction markets.
Stay ahead of iGaming’s biggest stories with SiGMA’s Top 10 News countdown. The world’s biggest iGaming community brings you weekly insights and subscriber-only offers. Join HERE today.
