A West Virginia lawmaker compared prediction markets to moonshine at the Global Gaming Expo, arguing that states, not Washington, should police the industry.
Del. Shawn Fluharty, a Democrat in the West Virginia House who also heads government affairs for Play’n GO, made the comments during the G2E session on prediction markets, regulatory oversight and integrity. He compared legal sports betting to a fine bottle of wine, then turned to predictions.
“It’s basically moonshine,” Fluharty said, according to CDC Gaming. “It’s not licensed. It’s not regulated. It’s great for tailgates, maybe, but you don’t know what the hell you’re getting.”
Fluharty served as president of the National Council of Legislators from Gaming States from 2023 until July, when Georgia Rep. Al Williams took over the role.
The fight over who regulates prediction markets offering sports event contracts appears headed to the U.S. Supreme Court.
The states have had the upper hand
Despite being federally regulated, prediction market operator Kalshi has had its fair share of court losses, with states prevailing repeatedly over the last several months.
The latest win included unanimous Sixth Circuit decision that allows Ohio and Tennessee to enforce their sports betting laws against Kalshi. The prediction market operator must geofence around three tribal reservations in California after losing another court case last week.
Kalshi was already blocked from offering sports event contracts in seven states before the Sixth Circuit ruling. Fluharty argued that is how it should be, taking a shot at the federal government’s polling numbers along the way.
“The states are the adults in the room and they should be responsible for implementing gaming and policing it and putting the guardrails in place,” Fluharty said. “Not the federal government. Come on! Have you seen their polling numbers lately?”
The operator still holds a favorable Third Circuit ruling from April, which prompted New Jersey to petition the Supreme Court to take up the case.
Gaming attorney Daniel Wallach has tracked 38 state wins in 43 rulings on preliminary injunctions, temporary restraining orders and stays pending appeal.
A federal regulator stretched thin
The Commodity Futures Trading Commission is overseeing a lot of new ideas with a smaller staff.
Since January 2025, the agency has cut 25% of its staff. Sen. Elizabeth Warren (D-MA) has called for an investigation into the cuts.
During the CFTC’s inaugural Innovation Advisory Committee meeting last month, CME Group CEO Terry Duffy said there have been 2,500 self-certifications from predictions operators, and none have been opposed.
Mention markets, which let users trade on whether a public figure will say a specific word or phrase, have been under scrutiny, too. Duffy argued some of those contracts violate Core Principle 3, which requires that contracts not be readily susceptible to manipulation.
The CFTC issued an advisory last week flagging heightened manipulation risks in mention markets and warned that exchanges must clear a higher bar before listing them.
AGA: predictions behind on consumer protections
Licensed sportsbooks are required to build responsible gambling tools into their apps, such as deposit limits and self exclusion. Critics argue prediction markets haven’t matched those safeguards, especially since they allow users as young as 18 to trade, while most state licensed sportsbooks require bettors to be 21.
American Gaming Association vice president of government relations Tres York made that point on the G2E panel.
“States have implemented a lot of consumer-protection aspects that I don’t think prediction markets have implemented, if at all, not nearly to the same extent, and it can cause a lot of harm to those people,” he said, according to CDC Gaming.
