Former US Lawmaker Comes Out in Defense of Prediction Markets
Former US Senator Blanche Lincoln, a one-time strong opponent of prediction markets while helping to write the Dodd-Frank Act in 2010, has had a change of heart. She's now calling for their widespread legalization in a stark policy reversal.
Lincoln, the then-Senate Agriculture Committee Chairman when the Dodd-Frank Act was being written, had earlier insisted that the Commodity Futures Trading Commission (CFTC) should have the authority to prevent derivatives contracts whose principal purpose is gambling. She had contended that sporting event contracts had no legitimate commercial underpinning and effectively represented gambling vehicles.
Fifteen years on, Lincoln is advocating for Kalshi, which recently hit a $2 billion evaluation after the latest round of funding for a federally regulated platform for the best prediction markets. She is calling on the CFTC to claim exclusive jurisdiction over all prediction markets, including those premised on sporting results. Writing comments to the CFTC last week, she characterized the markets as useful financial products under siege from state-level enforcement activity.
She further argued that these markets offer excellent commercial value. Events such as the Super Bowl are economically significant because they have substantial impacts on the advertising, merchandising, and hospitality industries.
Her demand for sole jurisdiction for the CFTC would trump state laws treating prediction markets as gambling and would be a jurisdictional concern.
Flutter's increasing interest
The best sportsbooks are not unaware of the popularity of prediction markets. In May, Flutter Entertainment CEO Peter Jackson spoke about the increasing importance of the space, calling it an emerging priority for the gaming sector. Flutter is planning to expand into prediction markets via FanDuel.
Jackson disclosed that Flutter had reassigned Betfair staff with experience in exchange-style betting to FanDuel to examine new market possibilities. While he made no official commitments, Jackson's comments showed a pragmatic desire to adjust to changing regulatory environments instead of fighting them.
This openness follows growing legal affirmation of prediction markets, specifically for Kalshi, which has surmounted several legal hurdles in the past few months. The firm is now pursuing regulatory approval for contracts tied to sporting results, a contentious space under consideration by the CFTC.
In the meantime, Flutter's main US rival, DraftKings, had made early moves into the space earlier this year with the registration of "DraftKings Predict" with the National Futures Association. While the company subsequently withdrew that application, the action indicated a possible tendency among large bookmakers to ultimately converge on the new model of prediction markets as a halfway point between financial products and conventional betting sites.
