Share 
The Pennsylvania Gaming Control Board is warning lawmakers of the potential harm prediction markets can cause within the state.
Executive Director Kevin F. O’Toole, General Counsel Steve Cook, and Chief Enforcement Counsel Cyrus Pitre each testified in front of the Gaming Oversight Committee earlier this week.
Prediction markets are financially traded contracts that can include sports outcomes. They are regulated federally through the Commodity Futures Trading Commission.
The PGCB regulates legal Pennsylvania sportsbooks but has no jurisdiction over prediction markets, which have been sweeping the nation.
Lack of consumer protections, RG tools
Because the PGCB regulates legal gambling, there are tons of protocols that are required to operate in the Keystone State. The PGCB conducts tests for safety and fairness, along with maintaining strict responsible gambling guidelines operators must adhere to.
The PGCB has established a strong self-exclusion program that allows individuals to ban themselves from wagering at retail casinos, PA online casinos, or wagering on sports. It is a strong measure for individuals to protect themselves.
Prediction market operators such as Kalshi, Robinhood and Polymarket are not subject to any of these compliance checks, which Cook cited as a major concern:
“This creates a disastrous gap in our safety net. A resident who has legally acknowledged a gambling problem and joined our exclusion list can simply use an app like Kalshi to trade on the very same sports outcome they are banned from betting on in the commonwealth.
“This undermines the efficacy of the state’s protection mechanisms. While federal platforms may offer voluntary opt-outs, they lack the statutory force, centralized enforcement and cross-operator blocking capabilities of the PGCB’s system.”
Legal sports wagering requires individuals to be 21 years old to place wagers. Prediction markets allow 18-year-olds to buy contracts, which could be as young as high school students.
That is another area of concern in the state, said Council of Compulsive Gambling of Pennsylvania Executive Director Josh Ercole.
“November is the first month, at the helpline, that our highest call demographic was 18-to-24-year-olds. Traditionally, we never saw numbers that high from that group.”
Ercole said the number of young gamblers calling for help has continually increased since 2021.
PGCB cautions legal operators
The PGCB has kept in constant dialogue with legal operators in the state. Pitre revealed to the committee that operators are starting to notice a loss in customers to prediction markets.
Despite that, it does not mean that legal operators can change offerings in Pennsylvania. Pitre issued a strict warning to those who try:
“I have been in contact dialogue with several Pennsylvania licensed casinos and operators considering national entry into this space.
“I have cautioned them that offering non-traditional prediction markets, whether sports or current events, within Pennsylvania, would certainly jeopardize their gaming license.”
Pitre confirmed that “all licensees” are not planning on pursuing prediction markets in Pennsylvania. He also established that an operator’s standing in another state could impact its license in Pennsylvania.
Fanatics, DraftKings, and FanDuel each plan to operate prediction markets, mainly in states that don’t allow sports wagering.
New Jersey and Kalshi are currently in litigation. The PGCB said a decision in that case could provide the direction Pennsylvania goes in when it comes to dealing with prediction markets.
