"Gambling is not investing": U.S. lawmakers form an alliance to pressure prediction markets, regulatory disputes over platforms like Polymarket escalate

On March 3, U.S. prediction markets are facing new political and regulatory pressures. A coalition called “Gambling Is Not an Investment,” led by South Carolina Republican Congressman Mick Mulvaney, was recently formed. The organization calls on the U.S. government to strengthen enforcement, restrict the expansion of prediction market platforms, and accuses these platforms of blurring the line between investment and gambling.

The coalition states that some prediction market platforms allow users to bet on sports events or major political developments, but these activities are still considered illegal gambling in some U.S. states. In a statement, Mick Mulvaney pointed out that regardless of whether these products are called “trades,” “investments,” or “predictions,” their essence remains gambling and should comply with state and tribal gambling laws. He warned that packaging sports betting as financial products could mislead consumers, weaken existing responsible gambling protections, and impact community public service funding that relies on gambling taxes.

Meanwhile, some U.S. lawmakers are pushing for stricter regulations. Senator Chris Murphy said he plans to introduce new legislation to limit certain types of bets in prediction markets. Murphy’s statement was prompted by a recent controversial report—newly registered accounts reportedly earned millions of dollars by accurately predicting the timing of Iran’s attack on the U.S. Murphy said such incidents highlight potential regulatory gaps in prediction markets and questioned whether there is insider trading related to political or military information.

However, the prediction market industry is actively fighting back. Several industry participants have formed a Prediction Market Alliance to legally challenge enforcement actions by some U.S. state governments. These platforms argue that states are overstepping their regulatory authority, and under current laws, prediction markets should primarily be regulated by the U.S. Commodity Futures Trading Commission (CFTC).

CFTC Chairman Michael Selig recently publicly stated that the agency is taking steps to ensure the legal development of prediction markets in the U.S. and to maintain transparency and stability in the derivatives market. He emphasized that if any institutions or state governments challenge the CFTC’s regulatory authority, the disputes will be resolved through the courts.

Despite ongoing regulatory disputes, the U.S. prediction market industry continues to grow rapidly. Industry sources indicate that some platforms are exploring new product models, including innovative “attention markets” that incorporate AI data analysis, demonstrating that the industry is still attempting to expand its market influence under policy pressures.