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FORT LAUDERDALE, Fla. – Even if regulators, courts, or a future presidential administration attempt to restrict sports event contracts, the prediction market industry may already be reaching a point where it would be difficult to unwind, according to speakers at an industry conference this week.
That assessment emerged during a panel discussion Thursday at the SBC Summit examining the future of prediction markets, where legal and compliance experts argued the industry’s rapid growth is creating political, economic, and regulatory realities that could make future rollbacks increasingly challenging.
“The longer it sticks around, the harder it is to get rid of,” said Ilya Beylin, an associate professor at Seton Hall University School of Law.
Markets becoming entrenched
Prediction markets remain at the center of an escalating legal and regulatory battle. Courts are currently weighing whether sports event contracts offered by federally regulated exchanges fall under the jurisdiction of the Commodity Futures Trading Commission and whether federal law preempts state gaming regulations.
While much of the industry’s attention has focused on those legal questions, panelists suggested a separate dynamic is beginning to emerge: market adoption.
Beylin said that if sports event contracts continue operating and attracting participants, future efforts to reverse course could face resistance from businesses, employees, and investors who have become economically dependent on the sector. A growing number of companies inside and outside the established gaming sector are applying for Designated Contract Market (DCM) registrations that permit them to offer “swap” contracts on thousands of events.
“What we’re seeing now, what we saw in the last year, year-and-a-half with sports markets through DCMs getting established, it’s a real pivotal moment where it’s going to be really hard to undo this stuff because you’re going to have embedded industry actors that are relying on this for their day-to-day, like going home to the family and feeding them dinner,” Beylin said. “So it’s going to be really hard to go back.”
He added that any future attempt to eliminate established markets could encounter political opposition as industry participants develop relationships with lawmakers and regulators.
“There would be people’s livelihoods on the line, and they would have a line to Congress,” Beylin said. “It’s not clear that Congress would approve of this kind of trying to put the toothpaste back in the tube once these markets got established.”
More rulemaking ahead
The discussion came just one day after the CFTC released a closely watched regulatory proposal addressing event contracts, including sports-related contracts and other markets that have become increasingly popular among retail traders.
Several speakers noted the proposal itself demonstrates how rapidly the regulatory conversation is evolving. Carl Kennedy, partner and co-chair of financial markets and regulation at Katten, said the agency has moved unusually quickly through the rulemaking process and could pursue additional proposals over the next several years.
“The chairman has made clear, and if you talk to CFTC staff, this is just the first of several rulemakings,” Kennedy said, adding that regulators are likely to address additional issues involving retail participation, advertising, customer onboarding, and market structure.
A coexistence model
At the same time, panelists argued prediction market sites and traditional sportsbooks should not necessarily be viewed as mutually exclusive products.
Arpita McGrath, chief regulatory and compliance officer at Sporttrade, said many observers continue to treat prediction markets and regulated sports betting as interchangeable when they operate under substantially different regulatory frameworks. Sporttrade is in the process of relinquishing its state-level sports betting licenses as it pursues a federal DCM license.
“A lot of people think that the argument is gaming or prediction markets, and that’s not really the case,” McGrath said. “It’s not apples to apples.”
McGrath pointed to differences between federal derivatives regulation and state gaming regulation, arguing certain activities permitted in CFTC-regulated markets are not available through traditional sportsbook structures.
DraftKings Predictions Exec Jeanine Hightower-Sellitto during today’s SBC Summit:
“I think prediction markets just become part of the overall landscape of both the financial and the sports betting outlook, and they’re just another tool and another product customers use on an…
— Ryan Butler (@ButlerBets) June 10, 2026
The panelists also suggested sportsbooks are likely to retain advantages in certain product categories even if prediction markets continue to expand. Sportsbooks can offer many player proposition wagers and other game-specific betting opportunities that may not fit within the framework currently being contemplated for federally regulated event contracts.
As a result, Kennedy said the two industries may ultimately develop alongside one another rather than compete for a single market.
“We may see more of that,” Kennedy said. “That may become more and more of the norm.”
The prospect of coexistence could further complicate future efforts to limit prediction markets. As more gaming companies, exchanges, technology providers, and financial firms enter the sector, stakeholders with an interest in preserving the markets are likely to multiply.
Beylin reiterated that dynamic may prove particularly important if a future administration seeks to reverse policies adopted by current regulators.
“What we’re seeing now … it’s going to be hard to go back,” he said.
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