Gambling Is Not Investing coalition challenges prediction markets over sports betting consumer protections

A newly formed coalition is entering the intensifying fight over sports betting and prediction markets, saying some platforms are dodging the consumer protections that govern legal gambling.

The organization, Gambling is Not Investing, officially rolled out Monday (March 2) in Washington, D.C. Its stated goal is to press for consistent safeguards by insisting that existing state and tribal gaming laws be enforced. Former Congressman Mick Mulvaney (R-SC) is serving as the group’s executive director.

At the heart of the dispute is the rapid growth of prediction market platforms that let users buy and sell contracts tied to real-world events, including sports games. Companies such as Kalshi describe these products as trading or investing. The coalition argues that, in practice, most of the activity looks and feels like sports betting.

Citing the New York Times, the group claims that Kalshi makes about 90% of its trading volume via sports events. Gambling is Not Investing says that the number undercuts the claim that these platforms are primarily financial exchanges. In its view, users are effectively wagering on games without the licensing rules, age verification requirements, tax structures, and responsible gaming standards that regulated sportsbooks must follow.

“Gambling products – regardless of what you call them – must follow established state and tribal laws,” said Mulvaney in a statement seen by ReadWrite. 

“Rebranding sports wagering as ‘trading’ or ‘investing’ or ‘predicting’ misleads consumers, undermines responsible gaming protections, and weakens the state and tribal systems built to protect the public and fund vital community services.”

Gambling Is Not Investing coalition part of a widening legal and political battle

Prediction markets fall under the oversight of the Commodity Futures Trading Commission (CFTC) at the federal level. Because they operate within that framework, companies can offer contracts nationwide, including in states where online sports betting remains illegal.

The structure has triggered a wave of legal and political clashes. Kalshi has filed a lawsuit against Utah after the state sought to block its sports-event contracts. In Oregon, a proposed class-action lawsuit accuses the company of offering what plaintiffs describe as unlicensed sports wagering. Nevada Rep. Dina Titus has introduced the Fair Markets and Sports Integrity Act in Congress, aiming to clarify the boundaries between federally regulated prediction markets and state-regulated sports betting. Connecticut Gov. Ned Lamont has backed legislation targeting prediction markets in connection with the state’s sports wagering laws.

Federal lawmakers have also raised concerns. A group of U.S. senators recently urged the CFTC to crack down on certain event contracts, including those tied to sensitive topics such as deaths, arguing they resemble gambling more than legitimate hedging tools.

Beyond sports, prediction markets have faced scrutiny over volatility and information advantages. Recent reporting has pointed out dramatic swings in contracts tied to geopolitical events and questioned how insider knowledge could influence thinly traded markets.

Gambling is Not Investing says these developments show that if product functions like gambling, it should be regulated like gambling. The coalition maintains that states and tribes have clear authority within their borders and that inconsistent oversight risks confusing consumers and draining tax revenue that funds public services.

The group is urging policymakers and regulators to enforce current laws rather than create new loopholes. 

Featured image: Gambling Is Not Investing via X

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