(DENVER 2/18/2026) — The National Conference of State Legislatures’ top finance committee in late January sent a letter to United States Senators urging them to reaffirm existing laws that give states the authority to regulate online sports betting and casino-style gambling. Websites such as Polymarket and Kalshi, which brashly advertise with slogans like “bet on anything,” have experienced unprecedented growth in recent years while skirting gambling regulations by classifying themselves as selling “event contracts.” This legal loophole allows these companies to operate nationwide while dodging important regulatory safeguards, including licensing standards, consumer protections, ‘know your consumer’ requirements, anti-money laundering rules, and regular compliance audits.
The NCSL’s Banking, Financial Services and Insurance Committee, on which Massachusetts Second Worcester District Senator Michael Moore serves as co-chair, writes that “prediction markets enable participants to buy and sell contracts based on the outcomes of future events, and in practice they function in ways that closely mirror legal sports wagering.” The letter urges Senators to include language that bolsters states’ existing authority to regulate these platforms under Murphy v. National Collegiate Athletic Association as the chamber considers cryptocurrency-related legislation.
“I want to be very clear: Massachusetts has the legal authority to regulate betting markets that operate like Polymarket and Kalshi. So, why is this letter necessary? Because these corporations are misrepresenting what they are to shield themselves from regulations that protect everyday people and taxes that fund critical state services. Congress must act immediately to force these companies to stop pretending they are anything other than online gambling platforms,” said Senator Michael Moore (D-Millbury). “It is not our goal to eliminate online gambling in Massachusetts, but betting platforms must operate on a level playing field and under a robust set of laws that are designed to defend Bay Staters from addiction, illicit business practices, and other drawbacks of these technologies. I am hopeful that NCSL’s bipartisan call to close this loophole will spur quick action in DC because using complicated classification minutiae to stiff our people will not be tolerated – in Massachusetts or anywhere else.”
Regulated betting markets, including platforms like DraftKings and FanDuel, have contributed $328 billion in economic activity in the 39 states that have legalized sports gambling, and have generated $53 billion in tax revenue while supporting 1.8 million jobs. Unregulated markets like Polymarket and Kalshi offer similar services while significantly reducing their tax and regulatory burden as “commodity” trades, despite over $1.6 billion in trading volume on the recent Super Bowl LX according to some analyses.
The letter comes as Commodity Futures Trading Commission chairman Michael Selig yesterday filed an amicus brief in federal court arguing that his agency has the sole authority to regulate prediction markets, preempting state regulations. Chairman Selig, appointed by President Donald Trump in October 2025 and confirmed by the US Senate in December, argues that the CFTC has exclusive jurisdiction over “event contract” prediction markets.
“Several Commodity Futures Trading Commission (CFTC)-registered prediction market platforms have ignored important regulatory safeguards, disregarding state gaming laws and diverting hundreds of millions of dollars in potential revenue that supports essential state and local services, including public safety, schools and infrastructure,” the letter states. “Furthermore, CFTC regulations, adopted under the Commodity Exchange Act, explicitly prohibit contracts involving gaming or any activity unlawful under state law. Thirty-nine state attorneys general have made it clear that these sports related event contracts violate their state laws.”
The letter closes by emphasizing that effective laws regulating sports betting and online gambling have been passed by bipartisan majorities in both red states and blue states. “Preserving state authority and flexibility in this area is essential.”
The letter was signed by co-chairs of the NCSL Banking, Financial Service and Insurance Committee Representative Jim Dunnigan (R-Utah) and Senator Michael Moore (D-Massachusetts), as well as Committee Vice-Chairs Representative Brenda Carter (D-Michigan) and Representative Michael Meredith (R-Kentucky). It was addressed to Senate Committee on Banking, Housing & Urban Affairs Chairman Tim Scott (R-South Carolina) and Ranking Member Elizabeth Warren (D-Massachusetts) and to Senate Committee on Agriculture, Nutrition and Forestry Chairman John Boozeman (R-Arkansas) and Ranking Member Amy Klobuchar (D-Minnesota).
The full letter can be found online here.
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