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The World Lottery Association and the North American Association of State and Provincial Lotteries are urging lawmakers and regulators to treat prediction markets as gambling products, not simply financial instruments.
In a new position paper cited by NASPL, the WLA argued that event-contract platforms should face the same licensing, consumer-protection, and integrity standards as sports betting and other regulated wagering. NASPL described prediction markets as a new form of gambling that tries to “conceal its true identity.”
The WLA’s central argument is functional: if a product depends on the outcome of an event, it amounts to a wager and should be regulated that way regardless of how an operator labels it or whether it falls under a derivatives framework. The group said “authorization under a financial or derivatives framework is not equivalent to a gambling licence.”
That concern goes beyond sports. The WLA said lottery draws are also compatible with prediction market structures because they involve clearly defined, verifiable, time-bound outcomes. It added that similar logic could extend to some casino-type outcomes, raising the prospect of lottery-style or casino-style event contracts outside traditional gaming regulation.
The paper warned that such products could undermine lottery monopolies and shift spending away from regulated lottery channels. According to the WLA, if lottery-equivalent event contracts captured 5% of annual global gross gaming revenue from the regulated lottery sector, public-benefit causes would lose more than $2 billion a year worldwide.
The WLA also cited estimates that at least 90% of monthly prediction market trading volume is driven by sports and other event contracts. On that basis, it called for a “functional definition” of sports betting and event wagering, mandatory gaming or betting licenses for all entities offering event contracts, and enforcement of existing rules including geoblocking and other regulatory action.
For players, the immediate takeaway is not that any rule has changed, but that pressure is building for tighter oversight. Both associations said weak regulation can create risks around consumer protection, responsible gaming, sports integrity, and law-enforcement efforts tied to tax evasion, money laundering, and racketeering.
What happens next depends on whether gambling regulators, financial regulators, or lawmakers act on those recommendations. For now, the issue remains a live regulatory debate in the U.S., with lottery groups pushing for clearer alignment between gaming and financial market oversight.
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Source: As reported by sbcamericas.com.
