Governors calling for oversight of prediction markets to be passed from federal regulators to state officials received a boost today after a former cabinet member leading an anti-prediction market coalition leveled his criticism of the practice.
In an interview with CNBC, former Donald Trump Chief Of Staff Mick Mulvaney referred to the exploding market as “just gambling”. Mulvaney heads up Gambling Is Not Investing, a group which seeks to stop the rebrand of, or perception of, sports wagering and risky predictions as “trading” or “investing”.
State authorities should regulate, says Mulvaney
A former South Carolina republican, Mulvaney’s role leading the coalition is drawing attention in Washington because it represents a notable break from the approach taken by the previous administration toward online betting and financial speculation.
Mulvaney, who previously directed the Consumer Financial Protection Bureau in Donald Trump’s first stint as President, is now fronting an effort that frames certain forms of online trading and sports betting as consumer risks rather than innovation. The stance contrasts with the earlier administration’s generally lighter regulatory posture toward emerging financial platforms and digital betting markets.
Speaking with CNBC Business Hour, he said: “I buy a prediction contract, whatever that is, on the Lakers winning the basketball game. If you ask any ordinary human being if that’s sports gambling, it absolutely is, they would think that it is,
“Look, I used to be a federal regulator. I ran the Consumer Financial Protection Bureau. Have nothing but the highest respect for the Commodity Futures Trading Commission (CFTC), but they’re not in the same business as regulating, say, sports gambling.”
Current events driving prediction market concern among lawmakers
Mulvaney highlighted the turbulent nature of current affairs as a market that requires much tighter controls.
“If someone’s trading in prediction markets on classified information, and our adversaries and our enemies are able to draw information about that … regarding our plans as a nation, how do you address that? If the Russians or the Chinese or the Iranians glean information from prediction markets that help them against us, how do you fix that?”
He’s not the only notable figure to raise concerns. Senator Chris Murphy posted on X he would be introducing law to combat the practice as soon as possible. He wrote: “I’m working on legislation to ban corrupt and destabilizing prediction markets, where insiders who know the outcome (especially in government) can rig the game to favor certain bets.”
Congresswoman Alexandria Ocasio-Cortez said earlier in the month: “If you are a person with power that can determine outcomes, then you can use that as an avenue for doling out favors.”
Meanwhile, a number of senators signed a letter addressed to the CFTC arguing that the under section 5c(c)(5)(C)(i), the Commodity Exchange Act expressly bars contracts that are “contrary to the public interest,” including those involving war, terrorism and assassination, and contend that several prediction markets appear to fall squarely within those prohibited categories.
The comments underscore a growing bipartisan unease in Washington about the rapid expansion of prediction markets tied to political events, national security and sports. Lawmakers raising alarms argue that without clearer limits, the platforms could create opportunities for insider trading, manipulation or the misuse of sensitive information.
Mulvaney refuses to be drawn on group funding
In the interview, Mulvaney was pressed on the funding behind his coalition. Some companies in the prediction market industry have raised questions about the motivations behind Gambling Is Not Investing,
They argue the overriding position of the coalition could benefit traditional sportsbooks and casino operators, which already operate under state gambling frameworks. If prediction markets were forced into the same regulatory system, companies like Kalshi or Polymarket could face tighter restrictions and higher barriers to operating nationwide. Because of that potential competitive impact, some industry figures speculate that gambling interests may be backing or encouraging the campaign.
However, Mulvaney told CNBC the group would not unveil its funding: ”We don’t reveal who we are, who funds us. We’re not required by law to do that.”
The debate over prediction markets is expected to intensify in the coming months as regulators, lawmakers and industry leaders clash over how the platforms should be classified
