The Govt Director of the Pennsylvania Gaming Management Board (PGCB), Kevin F. O’Toole, has taken difficulty with the rise of sports activities wagering on prediction markets. O’Toole claims that the “rising presence” of those markets is a “important risk” to Pennsylvania’s rules.
In a letter to the Commodity Futures Buying and selling Fee (CFTC), O’Toole urges the federal physique to look nearer at issues that may come up from the “dual-track system” that has emerged. States similar to Pennsylvania nonetheless have to manage sports activities wagering however haven’t any management over prediction markets, that are dealt with on the federal stage since they’re thought-about contracts.
Authorized, state-regulated gaming gives sturdy client protections and RG instruments. Elizabeth Lanza of @PAGamingControl notes these necessary protections at right now's RG Roundtable. pic.twitter.com/s4xvMMDG6t
— American Gaming Affiliation (@AmericanGaming) September 30, 2025
Predictions markets like Kalshi and Polymarket have seen an explosion of recognition over the past couple of years. Nonetheless, whereas they had been initially a mixture of user-made and company-made wagers, Kalshi has been making an attempt to launch sports activities wagering for a while.
In its full launch of NFL wagers, its first week introduced in $441 million. For comparability, that’s the equal of what was made through the US election season. The transition has additionally seen the corporate associate with FOX’s NFL protection.
Prediction markets are an issue for Pennsylvania, says O’Toole
Nonetheless, O’Toole and the PGCB see the encroaching prediction market as a problem, as regardless of it clearly being playing, the classification signifies that the PGCB can not regulate it. Quoted from the letter, O’Toole writes: “Sports activities prediction markets function underneath the assertion that they’re monetary derivatives, or swaps, and due to this fact declare to not be playing underneath state regulation.
“These markets successfully create a backdoor to legalized sports activities betting, working parallel to, however outdoors of, the state-regulated system, and with out strict oversight.”
It ought to be famous on oversight that CFTC chair nominee Brian Quintenz has but to be confirmed for his place. There’s been a few delays and postponements, and it’s now wanting just like the Trump administration is wanting elsewhere. Quintenz is on the Kalshi board. It’s attainable that one other choose, Josh Sterling, may very well be on the playing cards, nonetheless. Sterling is understood for arguing for prediction markets, having represented Kalshi towards the CFTC.
Additionally on the board of Kalshi is Donald Trump Jr., the President’s son. He was the topic of ridicule in the newest episode of South Park, which aired a parody of the prediction markets.
O’Toole additionally argues that the federal authorities shouldn’t be dealing with such small contracts on a person foundation. It additionally leaves rather a lot to be desired for client protections, one thing that’s introduced up within the letter:
“The jurisdictional conflict carries a major threat of leading to inconsistent and insufficient regulation.
“The CFTC’s framework is designed for derivatives markets usually involving refined institutional members. In distinction, state gaming regulators prioritize client safety for the general public, implementing detailed measures for accountable gaming, age verification, and drawback playing prevention.”
Featured picture: Pennsylvania Gaming Management Board
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