NASPL says prediction markets should face gambling regulation

The North American Association of State and Provincial Lotteries (NASPL) has urged regulators to classify prediction markets as gambling products subject to the same licensing and oversight as traditional betting, warning that failing to do so could undermine consumer protections, public funding and sports integrity.

In a new policy statement, NASPL said technological advances have enabled the emergence of “prediction markets”, which it described as a new form of gambling presented under a different label.

The association said the absence of appropriate regulatory frameworks could harm the integrity of sports and lottery games targeted by prediction markets, weaken responsible gaming and consumer protection measures, reduce public benefit funding, and complicate efforts by law enforcement to combat tax evasion, money laundering and racketeering.

NASPL argued that products offering financial gains or losses based on the outcome of future events meet the definition of gambling under many legal standards.

While participants may contend that prediction markets involve an element of skill, the association said outcomes remain predominantly driven by chance, making such contracts wagers that could constitute illegal gambling if offered outside established regulatory frameworks.

The statement cited a recent position paper by the World Lottery Association (WLA), which described prediction markets as “unlicensed betting by another name” and warned they threaten sports integrity, consumer protection and the regulated lottery and betting sector.

Quoting the WLA paper, NASPL said the growth of prediction markets had created “increasing tension with gambling regulation and sports integrity frameworks, highlighting the need for clarity regarding the legal qualification of prediction markets and their treatment under gambling law.”

NASPL endorsed the WLA’s call for “urgent regulatory clarification in all jurisdictions where prediction markets offer or even plan to offer sports events or other event contracts.”

The association quoted the WLA as saying that “if a product offers a financial return contingent on the outcome of an event—sporting, political, or otherwise—then it constitutes a wager or bet. It must be licensed and regulated as such, irrespective of the operator’s preferred label.” 

NASPL said regulated lotteries operate under established public policy frameworks that require consistent legal definitions, operational transparency, financial accountability and enforceable compliance standards.

The association added that its members have a responsibility to help policymakers understand and address the regulatory issues posed by prediction markets while protecting the public interest and the beneficiaries funded through lottery proceeds.