Shipkevich PLLC founder and principal Felix Shipkevich was recently featured in CasinoBeats discussing the evolving regulatory landscape surrounding prediction markets and the ongoing question of federal versus state authority over event contracts.
Prediction markets have expanded rapidly in the United States, allowing participants to trade contracts based on the outcomes of elections, sporting events, economic indicators, and other real-world events.
Their growth has also created significant regulatory questions, particularly as states challenge prediction market operators while the Commodity Futures Trading Commission (CFTC) asserts federal jurisdiction over event contracts offered through federally regulated exchanges.
In the CasinoBeats feature, “Midterm Democratic Victory Won’t Give States Upper Hand Over Prediction Markets, Says Lawyer,” Felix Shipkevich provided extensive analysis of where the regulatory landscape currently stands and the issues that remain unresolved.
Federal Versus State Authority Over Prediction Markets
One of the central legal disputes surrounding prediction markets is whether certain event contracts fall primarily under federal commodities regulation or state gambling laws.
Shipkevich told CasinoBeats that he expects the CFTC to continue asserting its authority over federally regulated event contracts regardless of the outcome of the 2026 congressional elections.
“During the next two-plus years of the presidency, the CFTC will continue to claim exclusive jurisdiction and authority over federally regulated event contracts.”
The CFTC’s position has become central to legal disputes involving prediction market platforms and states seeking to apply their own gambling laws to certain contracts.
Shipkevich noted that the Commodity Exchange Act provides an important foundation for the federal regulatory argument surrounding these products.
“I would be surprised if any court decides against the CFTC, since these types of contracts are embedded in the Commodity Exchange Act and should only be governed at the federal level.”
For prediction market operators and other businesses entering the sector, the outcome of these jurisdictional disputes could significantly influence how event contracts are regulated across the country.
Regulatory Questions Extend Beyond Jurisdiction
Determining whether federal or state regulators have authority is only one part of the developing legal framework.
Shipkevich emphasized that several important regulatory and compliance questions remain unresolved even where the CFTC’s federal role is more clearly established.
“While we have some clarity on the federal level from the CFTC, not all concerns have been addressed concerning these newly available trading products.”
Those questions could become increasingly significant as prediction markets expand and more established gaming and financial services companies enter the sector.
Consumer Protection, Market Integrity and Compliance
Shipkevich identified several areas that regulators and market participants may need to address as prediction markets mature.
These include election-related contracts, market manipulation, advertising practices, age restrictions, consumer protection, and anti-money laundering requirements.
As Shipkevich explained:
“We need to understand how and if these prediction platform operators affect trading involving election integrity, market manipulation, advertising, age restrictions, consumer protection, and anti-money laundering requirements.”
These issues demonstrate why prediction markets can sit at the intersection of several different regulatory frameworks.
Operators may need to consider not only commodities regulation but also consumer financial protection, advertising requirements, financial crime compliance, and other federal and state obligations depending on their products and business models.
The Expansion of Prediction Markets
The regulatory questions surrounding prediction markets are becoming increasingly significant as the sector attracts participation from established gaming and financial services companies.
The CasinoBeats article notes that sportsbook operators have begun entering the prediction market space, further blurring traditional distinctions between event contracts, financial products, and sports wagering.
For companies considering entering this market, regulatory structure may therefore become just as important as product development.
Understanding how a particular contract is structured, where it is offered, how it is marketed, and which regulator has jurisdiction can have significant implications for compliance.
A Long-Term Role for Prediction Markets
Despite the unresolved legal questions, Shipkevich told CasinoBeats that he expects prediction markets to remain part of the financial and consumer landscape.
However, he cautioned against interpreting federal regulation as unlimited authority to offer every conceivable event contract nationwide.
“I expect prediction markets to survive and become a meaningful part of the financial and consumer landscape.”
Shipkevich added an important qualification:
“But not under the theory that every yes or no contract can be offered nationwide merely because it is listed on a CFTC-regulated exchange.”
That distinction may become increasingly important as courts, regulators, states, and market participants continue defining the boundaries of permissible prediction market activity.
An Evolving Regulatory Framework
The growth of prediction markets illustrates the broader challenges that can arise when emerging financial products do not fit neatly within traditional regulatory categories.
For prediction market operators, fintech companies, gaming businesses, financial institutions, and other companies exploring event-based contracts, understanding the relationship between federal commodities law and state regulation will remain an important compliance consideration.
Felix Shipkevich’s commentary in CasinoBeats reflects his extensive work in commodities, derivatives, digital assets, and financial regulation. His practice includes advising clients on CFTC and NFA registration and compliance as well as matters involving emerging financial technologies and overlapping federal and state regulatory authority.
As prediction markets continue to evolve, businesses operating in the sector will need to closely evaluate both the opportunities presented by these products and the regulatory obligations that accompany them.
Read full article here:
https://casinobeats.com/2026/08/20/midterm-democratic-victory-wont-give-states-upper-hand-over-prediction-markets-says-lawyer/