TLDR
- Massachusetts’ top gaming regulator called prediction market sports contracts “sports wagers by another name.”
- He backed the state attorney general’s lawsuit against Kalshi, which awaits a court ruling.
- Rep. Alma Adams said the CFTC should not allow a “loophole” around state gambling laws.
- 71% of Massachusetts residents aged 18 to 25 have bet on sports.
- All four witnesses agreed that ending college player prop bets would help reduce problem gambling.
Prediction markets came under fire at a congressional hearing Wednesday, as a state gambling regulator told lawmakers the platforms offer illegal sports bets. The hearing focused on the rise of sports gambling on U.S. college campuses.
Jordan Maynard, chairman of the Massachusetts Gaming Commission, testified before the House Subcommittee on Higher Education and Workforce Development. He called sports-event contracts “sports wagers by another name.”
Maynard said these platforms avoid state laws, taxes and problem-gambling rules that licensed sportsbooks must follow. “As it stands, prediction markets are illegally offering sports wagering in Massachusetts,” he said.
He added that the Commodity Futures Trading Commission is not equipped to regulate sports betting to state standards. He said this creates two sets of rules for products that look exactly the same.
Regulator Backs State Case Against Kalshi
Maynard backed a lawsuit filed by Massachusetts Attorney General Andrea Joy Campbell against Kalshi. The case is awaiting a decision from the Massachusetts Supreme Judicial Court.
He also said his agency gets calls asking it to step in on customer disputes with companies it does not regulate. Those firms have not applied for a sports betting license in the state.
Ranking subcommittee member Alma Adams, a North Carolina Democrat, said the CFTC should not be able to use a “loophole” to get around state gambling laws. She said prediction markets call a bet an event contract and claim state rules do not apply.
Adams said the agency has stepped back from its role as regulator while “the president’s son has money in the game.” She added that students are not a market to be exploited.
Young Bettors at the Center of the Hearing
Maynard told the panel that 71% of Massachusetts residents aged 18 to 25 have bet on sports. A Boston University School of Public Health survey found 34% of college students using sportsbook apps are under 21.
In Massachusetts, that share was about 22%. The legal age to bet on sports in the state is 21.
Maynard said age checks have blocked at least 11,000 accounts from people under 21. Some young people still bet through the accounts of parents, siblings or older friends, known as proxy betting. “It’s not harmless, it’s illegal,” he said.
Massachusetts bans player prop bets on college athletes and limits betting on in-state college sports. It also bans ads aimed at people under 21 and bans advertising on college campuses.
All four witnesses agreed that ending player prop bets would help lower problem gambling among students. Cindy Clouner of Ohio State University said federal rules would work better than a patchwork of state laws.
Dr. Lindsey Mortenson of the University of Michigan said, “We don’t tolerate over-serving of alcohol in bars.” She added that young people are being over-served on sports betting.
Witnesses said many students do not see sports betting as gambling and do not seek help. Some view it as a money problem, not a behavior problem.
Representative Michael Baumgartner, a Washington Republican who chaired the hearing, cited a 2023 NCAA survey. It found 67% of on-campus students had bet on sports and 16% showed problem-gambling behaviors.
The survey also found 6% of students had lost more than $500 in a single day. Baumgartner said he believes the figures “are likely even higher today.”
