Lottery Operators Warn Prediction Markets Threaten Funding for Public Programs

July 23, 2026

Global lottery organizations are stepping up their opposition to prediction markets, arguing that the contentious internet platforms allow gambling under the pretense of financial trade.

In a statement, the North American Association of State and Provincial Lotteries (NASPL) denounced authorities for permitting sports betting on prediction markets.

The Commodity Futures Trading Commission (CFTC) has effectively legitimized illicit gambling on prediction markets, according to the NASPL, which represents 50 member lottery organizations, the majority of which are based in the United States.

“Predictions rely on an event or condition expected to happen in the future. In this case, even though a participant may claim there is an element of skill involved in making their ‘prediction,’ the overwhelming elements of chance involved in the outcome of that ‘prediction’ in fact make it a ‘wager’ and therefore a probable illegal gamble,” the NASPL said in its statement on prediction markets.

“‘Gambling,’ historically, has meant paying money, or some other sort of consideration, for the random chance to win a prize. Even if there is some element of skill involved in the wager, the fact that chance can play a primary role in the outcome of the wager makes the event a gamble,” the NASPL continued.

Danger to Lotteries and the People Who Win Them

The World Lottery Association's (WLA) May position paper opposing prediction markets on worries that the financial trading exchanges endanger the lottery business and the numerous initiatives its operations support is echoed in the NASPL statement.

Together with the WLA, the NASPL has demanded "urgent regulatory clarification" in every jurisdiction where sports trading is available through prediction markets. The lottery companies are targeting not just sports but also political prediction market event contracts.

“If a product offers a financial return contingent on the outcome of an event—sporting, political, or otherwise—then it constitutes a wager or bet. It must be licensed and regulated as such, irrespective of the operator’s preferred label,” the WLA wrote in May.

According to the NASPL, the majority of its members' lotteries originated from the public policy process to generate vital funds for public education, college scholarships, local grants, property tax relief, and elder programs.

Prediction markets do not pay high licensing costs or state taxes on their operating income.

“Prediction market operators that avoid these obligations enjoy a structural competitive advantage that is entirely the product of regulatory evasion rather than superior product quality or genuine innovation. This competitive distortion is harmful not only to individual licensed operators—it threatens the public funding streams that depend on a viable, sustainable regulated gaming sector,” the WLA wrote.

Superiority in Lotteries

According to the NASPL, its member lotteries offer advantages to the public that other legal gambling options cannot match.

“Lotteries are the most impactful gaming activity, born of the public policy process under which we and our beneficiaries and sanctioned competitors operate. NASPL members have a responsibility and a key opportunity to be a resource for that process as it works to understand and address prediction markets,” the statement concluded.