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Pennsylvania Attorney General David W. Sunday, Jr. has joined a coalition of 44 states pushing back against a federal proposal that could dramatically reshape who regulates sports wagering nationwide.
The coalition, led by Ohio Attorney General Andy Wilson, submitted a comment letter to the Commodity Futures Trading Commission (CFTC) on July 27, opposing the agency’s proposed rule on prediction markets and event contracts. The letter argues the rule would let federally regulated exchanges offer Pennsylvania sports betting products while bypassing state licensing, age verification, and consumer protection laws entirely.
The CFTC’s proposal, published June 12 in the Federal Register, would reverse a 15-year-old agency rule that barred gambling-related contracts from trading on its regulated markets. States argue the change would let the CFTC serve as a national gambling regulator, sidestepping frameworks like the Pennsylvania Gaming Control Board.
What the states are arguing
The coalition’s letter makes three central claims: that the CFTC lacks statutory authority to regulate sports wagering under the Commodity Exchange Act, that the rule would violate federal rulemaking standards by ignoring how it affects states and consumers, and that granting the CFTC this much discretion could raise constitutional concerns.
The states contend gambling has historically been a matter of state, not federal, oversight. The letter states plainly that the CFTC’s rule “would drastically expand federal regulatory authority in an area of major economic and political consequence that States have traditionally regulated.”
The coalition also points to specific consumer risks tied to unregulated prediction markets, including that such platforms often allow wagering starting at age 18, compared to the 21-plus minimums enforced under most state sports wagering laws, including Pennsylvania’s.
Why it matters for Pennsylvania
Pennsylvania has built out a detailed regulatory structure for sports wagering under the Pennsylvania Race Horse Development and Gaming Act, including licensing requirements, age verification, and problem gambling protections overseen by the Gaming Control Board.
The coalition’s letter argues that if the CFTC’s rule takes effect, similar sports-outcome contracts could be offered nationally through federally registered platforms without going through any of those state-level protections. That would create what the states describe as regulatory confusion for operators and reduced safeguards for bettors.
The letter also raises concerns about contracts tied to individual player performance or award races, arguing the CFTC’s proposed definitions are broad enough to sweep in bets that function identically to traditional sports wagering while avoiding classification as “gaming” under the rule.
Pennsylvania lawmakers have already moved to address this gap at the state level. Rep. Danilo Burgos introduced House Bill 2497 in May, which would require prediction market operators to obtain a license, pay a 20% tax on revenue, and comply with consumer protections similar to those governing sports operators. Sunday’s coalition letter reinforces the argument behind that bill: that states, not the CFTC, should set the rules for these products.
The CFTC has not yet finalized the rule. The agency’s five-member commission currently has only one sitting commissioner, which the coalition’s letter notes may complicate the CFTC’s ability to take final action on the proposal at all.
