Nevada Proposes Federal Ban on Unregulated Sports Prediction Markets

The legal landscape for prediction markets in the United States is facing a massive overhaul as two Nevada Congressmen, Steven Horsford and Mark Amodei, introduced the Prediction Markets are Gambling Act. This bipartisan effort aims to prevent platforms regulated by the Commodity Futures Trading Commission (CFTC) from offering sports event contracts. The lawmakers argue that these products are essentially sports betting masquerading as financial trading, an act that traditionally falls under state and tribal jurisdiction rather than federal oversight.

According to the proposal, while general prediction markets related to politics or the economy would remain under the CFTC's purview, any contract based on sports outcomes should be strictly classified as gambling. Congressman Mark Amodei highlighted the importance of state sovereignty in this matter, stating that unelected federal regulators should not override long-standing gaming policies established by individual states. The American Gaming Association (AGA) and the Indian Gaming Association (IGA) have lent their full support to this bill, fearing that the proliferation of these markets drains millions in tax revenue and undermines the integrity of the regulated industry.

Numbers and facts

The scale of the issue is illustrated by staggering trade volumes. Estimates suggest that during the 2026 FIFA World Cup, trading volume for sports event contracts topped $50 billion. This surge in popularity led to a clash between the CFTC and state authorities. In March 2026, Nevada became the first state to successfully secure a 14-day temporary restraining order (TRO) against the exchange Kalshi. The court order, granted to the Nevada Gaming Control Board (NGCB), forced the platform to block sports, entertainment, and election contracts for users within the state. NGCB Chair Mike Dreitzer stated that the board has a statutory duty to ensure people wager safely at licensed sportsbooks rather than unlicensed prediction markets.

Background

Advocates for prediction markets often compare sports contracts to traditional futures for grain or corn, arguing they are legitimate financial derivatives. However, critics like IGA Chair David Bean pointed out during a House subcommittee hearing that there is virtually no difference between these contracts and traditional wagers like over/unders or prop bets. He famously remarked that the CFTC has gone from monitoring "crops to props," suggesting the agency is ill-equipped and understaffed for such a task. The new bill seeks to clarify this by reinforcing that federal law cannot override state and tribal gaming regulations.

"Gaming policy has long been the responsibility of states and tribes, not unelected federal regulators. This bipartisan bill closes a federal loophole that allows sports betting to masquerade as financial trading and ensures legitimate event contracts remain under the CFTC’s jurisdiction." - Mark Amodei, Congressman for Nevada

Why it matters for German players

For residents of Germany, this development serves as a warning against using unregulated or grey-market platforms. In Germany, the Interstate Treaty on Gambling 2021 (GlüStV 2021) provides a very clear legal framework. Any activity involving a stake for a chance to win based on sports outcomes is classified as gambling and requires a license from the GGL (Gemeinsame Glücksspielbehörde der Länder). German players are protected by mandatory limits, such as the 1,000 Euro monthly deposit limit and the 1 Euro per spin limit for virtual slots. Prediction markets operating without such safeguards would be considered illegal in Germany. The struggle in Nevada highlights that even in a globalized economy, the protection of local gaming integrity and consumer safety remains paramount.

What it means for GGL-licensed casinos

Licensed operators in Germany benefit from a transparent regulatory environment that excludes the legal ambiguity currently plaguing the US market. The proposed US federal ban on sports event contracts confirms that the separation of gambling and financial services is a global regulatory trend. For GGL-licensed books, this reinforces the value of their licenses, as it prevents new, unregulated competitors from entering the market under the guise of financial innovation. Compliance with LUGAS and the OASIS blocking system ensures long-term sustainability that platforms currently fighting court orders in Nevada simply cannot guarantee.