Nevada regulator says CFTC should treat sports event contracts like sportsbook bets

Nevada Gaming Control Board Chairman Mike Dreitzer is pushing back on the CFTC’s effort to build a separate framework for prediction markets, arguing that a $10 contract on an NFL game and a $10 sports bet are, in practice, the same transaction. For high-risk operators, the point is simple: if regulators accept that view, sports-event contracts keep drifting toward gambling rules, not away from them.

1. On October 14, Dreitzer said during a webinar hosted by the Indian Gaming Association that the CFTC’s proposal draws lines between products in a way that does not match how they actually work. He was responding to two measures the CFTC proposed last week: one would expand the federal definition of a swap to cover event contracts involving sports, politics, cultural events and weather, while a separate interim final rule says casino-style gambling, including sportsbook wagers and casino games, is not within that definition.
2. Dreitzer argued that the core comparison is straightforward: if a customer risks $10 on an NFL game through a sportsbook or through a contract tied to the same event, the transaction is functionally the same. His position is that changing the wrapper does not change the regulatory reality.
3. He also rejected the idea that prediction markets escape gambling law simply because they are peer-to-peer. His point was that poker, horse racing and bingo also involve players competing against each other, so peer-to-peer structure alone does not take a product outside gambling rules.
4. Another issue for Dreitzer was counterparty risk. He questioned whether prediction markets really pit retail users only against other individuals, noting that hedge funds, designated contract markets and affiliated trading entities can also take positions against retail customers.
5. He disputed the claim that prediction markets create better price discovery, saying sophisticated financial firms can disadvantage casual traders instead of producing a fairer market. He also said the ability to close a position before an event ends is not a clean dividing line, since online sportsbooks have offered cash-out options for years.

Dreitzer also raised consumer-protection concerns, pointing out that some prediction market sites allow 18-year-olds to participate. Nevada has already seen litigation over the issue, including a court battle its regulator won against Kalshi, and similar fights are moving through courts in other states.