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(AsiaGameHub) –   A prominent leader in the U.S. gambling sector has urged the Commodity Futures Trading Commission (CFTC) to cease its defense of prediction market platforms and instead focus on overseeing financial markets.

These remarks were made by Bill Miller, CEO of the American Gaming Association, headquartered in Washington D.C., as reported by the Washington Times.

Miller stated that “[Prediction markets] are misleadingly presenting sports betting as financial contracts and investment opportunities, despite employing rhetoric intended to deceive both policymakers and the general public.” He added, “They are progressively being revealed as covert sports betting enterprises.”

Miller delivered these comments during a May 20 session of the Senate’s Commerce, Science, & Transportation Subcommittee on Consumer Protection, Technology, and Data Privacy.

This hearing takes place amidst ongoing resistance from various states against the CFTC, which maintains that it possesses exclusive authority to regulate prediction markets.

New Jersey has indicated its intention to escalate its legal dispute with Kalshi to the Supreme Court. Prosecutors are seeking the court’s intervention to compel the operator to comply with the state’s sports betting regulations.

U.S. Gambling Head Calls CFTC’s Regulatory Assertions ‘Absurd’

CFTC Chairman Michael Selig recently declared that prediction market platforms, including Polymarket and Kalshi, constitute “financial markets.” In contrast, Selig noted, traditional casinos and sports betting operators are categorized as “entertainment” providers.

Major sports leagues, such as the NFL, have voiced opposition, urging the CFTC to prohibit numerous sports-related contracts. The CFTC claims it is engaging with “all the professional leagues” to address insider trading on prediction markets. However, Selig maintains strong opposition to granting states ultimate authority on this issue.

Miller informed the subcommittee that the CFTC’s purpose is to “regulate markets essential to the nation’s economic operation, not to oversee Monday Night Football.”

He noted that the CFTC employs 500 individuals. Miller further asserted that the notion “that they could somehow manage and facilitate a nationwide sports betting network is preposterous.”

Conversely, representatives for prediction markets disputed these assertions, contending that leading operators independently regulate activities on their platforms.

Patrick McHenry, former Chairman of the Congress Financial Services Committee and currently a senior adviser for the Coalition for Prediction Markets, stated that these platforms employ more stringent surveillance standards than casinos.

He explained that prediction market operators actively prohibit users, and the CFTC mandates that operators implement know-your-customer (KYC) and anti-money laundering (AML) protocols.

McHenry additionally contended that twelve states permitting gambling have, to date, not succeeded in banning advertising potentially viewable by minors.

In contrast, the former lawmaker noted, prediction markets have implemented “a comprehensive prohibition preventing anyone under 18 from accessing these products.”

McHenry concluded that Coalition members have embraced “superior standards” compared to those typically employed by most “average” states.

No Intent for a ‘Federal Department of Gambling’

The head of the AGA asserted that financial regulators ought to refrain from overseeing sports betting.

Miller stated that Congress had no intention of establishing a “Federal Department of Gambling” when it created the CFTC in 1974.

He pointed out that 41 state attorneys general have instructed the CFTC to “desist.” Miller further mentioned that these attorneys general argue states maintain the right to regulate prediction markets.

Miller remarked that the regulator is exercising “control and dominance in an area where, quite frankly, they have no legitimate involvement.”

Senator John Hickenlooper seemed to concur with Miller’s position, challenging McHenry’s claim that the CFTC possesses the capability to oversee the market.

Hickenlooper responded, “You are the first individual who has suggested to me that they believe the CFTC meets the required standards.”