Revisiting the Legal Definition of “Gambling” in an Era of Prediction Markets and Other Gambling-Like Activities

Session Title

Regulation: Legal Frameworks & Oversight

Presentation Type

Paper Presentation

Start Date

27-5-2026 12:00 AM

Abstract

Absent a clear definition, there is growing confusion around what constitutes “gambling” for purposes of legislation and regulation. Prediction markets, some trading platforms, and social sports wagering apps have followed the precedent of daily fantasy sports and cryptocurrency trading in skirting the legal prescriptions applied to gambling operators on legalized platforms worldwide. Most recently, tensions increased when prediction markets began offering sports-related event contracts nationwide, threatening sportsbook revenues, state tax income, and gambling bans in non-legal states. Many view these markets as gambling, while prediction market executives argue they function as financial markets because payouts are set by market activity, not bookmakers. This presentation will outline this debate and the legal implications of public policy considerations that attempt to distinguish gambling behavior and the infrastructure for gambling-like activities. For example, an event contract is a mechanism not a behavior and can support both gambling and non-gambling uses. This distinction calls into question the claim that federal oversight by the Commodity Futures Trading Commission supplants state gambling law. The resulting tension challenges the historically state-controlled gambling framework by promoting activity that is virtually indistinguishable from illegal gambling. Applying traditional legal definitions of gambling to these emerging mechanisms will be discussed.

Author Bios

Dr. Cho has been at the Center for Gambling Studies since 2019 where he started as a postdoc. He earned his PhD in Hospitality from the University of Nevada Las Vegas. He has authored or contributed to papers published in Cornell Hospitality Quarterly, International Journal of Contemporary Hospitality Management, and Computers in Human Behavior. Prior to his academic work, Dr. Cho has over fifteen years of industry experience including corporate and operational leadership roles.

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May 27th, 12:00 AM

Revisiting the Legal Definition of “Gambling” in an Era of Prediction Markets and Other Gambling-Like Activities

Absent a clear definition, there is growing confusion around what constitutes “gambling” for purposes of legislation and regulation. Prediction markets, some trading platforms, and social sports wagering apps have followed the precedent of daily fantasy sports and cryptocurrency trading in skirting the legal prescriptions applied to gambling operators on legalized platforms worldwide. Most recently, tensions increased when prediction markets began offering sports-related event contracts nationwide, threatening sportsbook revenues, state tax income, and gambling bans in non-legal states. Many view these markets as gambling, while prediction market executives argue they function as financial markets because payouts are set by market activity, not bookmakers. This presentation will outline this debate and the legal implications of public policy considerations that attempt to distinguish gambling behavior and the infrastructure for gambling-like activities. For example, an event contract is a mechanism not a behavior and can support both gambling and non-gambling uses. This distinction calls into question the claim that federal oversight by the Commodity Futures Trading Commission supplants state gambling law. The resulting tension challenges the historically state-controlled gambling framework by promoting activity that is virtually indistinguishable from illegal gambling. Applying traditional legal definitions of gambling to these emerging mechanisms will be discussed.