ICYMI: Cortez Masto for Newsweek: Illegal Sports Gaming is A Problem We Can’t Wait to Address

In Case You Missed It, U.S. Senator Catherine Cortez Masto (D-Nev.) published an op-ed in Newsweek calling attention to how the Commodity Futures Trading Commission (CFTC) continues to enable illegal sports gaming through the use of event contracts. Cortez Masto has previously called attention to this issue in letters to both current CFTC Chair Mike Selig and previous acting Chair Caroline Pham.

Newsweek: Nevada Senator: Illegal Sports Gaming is A Problem We Can't Wait to Address

By Senator Catherine Cortez Masto

For nearly 100 years, Nevada has been the nation's leader in legal gaming. A big part of that success can be attributed to the cooperative relationship between the legal gaming industry and the state. Nevada uses gaming revenues to fund everything from public schools to public transportation. And to ensure responsible gaming, casinos, sportsbooks and online gaming sites have to follow minimum age requirements, participate in integrity monitoring and support critical consumer protections, like programs that help people with gambling addictions.

Yet, this past year, emboldened by limp and overly permissive federal regulators like the Commodity Futures Trading Commission (CFTC), so-called "prediction markets" have transformed themselves into illegal sportsbooks, offering their users illicit sports wagers. Since they began offering sports-related "event contracts"-which are just wagers by another name-outfits like Kalshi have seen illegal sports betting become 90 percent of their weekly trading volume.

The CFTC, led by Michael Selig, has looked the other way as these prediction markets blatantly violate state and tribal laws and regulations. Wagering regulations didn't just spring up overnight-in 1949, Nevada became the first and only state in the nation to legalize sports betting. This authority was extended to other states by the Supreme Court in 2018, but at no point did the federal government gain the power to permit or outlaw sports wagering on a national basis.

Prediction markets defy all of the commonsense and proven rules of the road that allow our gaming industry in Nevada and across the country to be socially responsible community partners. These operations don't follow traditional minimum age restrictions-18-year-olds who otherwise could not gamble in Nevada can make an account on Kalshi or Crypto.com. They don't work to combat problem gambling-users are encouraged to place unlimited bets on anything and everything and provide incentives to encourage more interactions. And, they don't do any integrity monitoring whatsoever. In fact, Polymarket's CEO has explicitly endorsed insider trading, saying "it creates this financial incentive for people to go and divulge the information to the market."

In every way imaginable, the CFTC and prediction markets are shamelessly failing Nevadans and enriching their billionaire shareholders in the process.

In September, Utah Senator John Curtis and I led a bipartisan group of senators in reminding then-Acting Chair Caroline Pham that the CFTC does not have jurisdiction over sports gaming in any capacity. Rather than offering any guidance as to how they plan to address this issue, the CFTC merely provided boilerplate responses that don't give any insight beyond what is available on their website.

This problem was especially evident on Super Bowl Sunday, when Kalshi users placed more than $1 billion in Super Bowl-related bets. This rivaled the more than $1.5 billion in legal wagers placed across the entire United States and includes bets placed in states where sports gaming is outlawed. Additionally, college basketball's March Madness tournament is around the corner, and it seems like the CFTC will allow this problem to persist.

That's because, despite prediction markets' flagrant disregard of states' and tribes' authority to regulate gaming, the CFTC has continued to ignore its mandate to prevent illegal sports wagering facilitated through CFTC-regulated exchanges. In fact, in recent weeks, the CFTC has become a full-throated endorser of prediction markets.

This move directly contradicts Selig's testimony to Congress in November, where he on multiple occasions stated that he would not "prejudge" the legality of this business and that he would "defer to the courts" in their decisions.

He also declared his intention to support these companies in countless state lawsuits that seek to bar them from operating these illegal sportsbooks. Selig swiftly followed this announcement by inserting the CFTC into litigation in Nevada, asserting that the state has no authority to regulate these sports wagers.

The question is, why?

The answer could be, at least in part, that President Donald Trump-who nominated Selig to his post-as well as his son, Donald Trump Jr., have a vested personal financial interest in the continued profitability of these operations. President Trump's Truth Social has announced plans to offer event contracts on the platform, and Trump Jr. is an adviser to both Kalshi and Polymarket.

Just recently, it was revealed that Crypto.com made a large donation tied to President Trump. Crypto.com has also pursued a partnership with Truth Social, the Trump family's social media platform. This is the same company the CFTC is now supporting in its bid to challenge Nevada laws that bar its continued operation.

It's hard to see this as anything but a repudiation of state and tribal authority in an effort to enrich President Trump, his family and their billionaire supporters.

As he continues his efforts to trample on Nevada and other states' rights, Selig should keep in mind that, ultimately, this corruption will all come to light. This administration will have to answer to Congress, and that moment may come sooner than he thinks.

###