Trump administration sues three states over attempts to regulate prediction markets
The suits are the most ambitious effort to date that the Trump administration has gone to try to override state laws and set the rules for the fast-growing and increasingly divisive betting industry.
The Trump administration on Thursday filed lawsuits against three states, arguing that the controversial prediction market industry should be solely regulated by the federal government, not by state gambling commissions.
The trio of legal actions against Illinois, Connecticut and Arizona is the furthest Trump officials have gone to try to override state laws and set the rules for a fast-growing industry that has run headlong into thorny questions about insider trading and profiting off war and suffering.
Related Knowledge Center: Prediction markets
Platforms are offering a way for users trade positions — place bets — on a wide range of possible events, and newsrooms are starting to incorporate the data.
As the business rapidly grows, critics and opponents are pushing back. Numerous states have argued that the markets are gambling, and sports gambling in particular is regulated by the state. The Commodity Futures Trading Commission, now led by a Trump appointee, disagrees — as did a federal district court judge in a suit involving New Jersey.
Critics see some of the markets as, particularly in the case of military actions, indefensible, and note as well that some large, well-timed bets — “event contracts” — suggest an abuse of insider knowledge of federal actions.