They Are What We Thought They Were

The CFTC's newly proposed prediction market rules offer clarity on what is and isn't allowed, but do not go far enough for the gambling industry.

Jun 11, 2026

The Bulletin Board

THE LEDE: Sizing up the CFTC’s new prediction market rules.
VIEWS: How poker became a game for the few; not the many.
UPCOMING WEBINAR: The Gamblification of Everything.
AROUND the WATERCOOLER: The confusing case of a Spanish Soccer Team.
STRAY THOUGHTS: My new favorite Substack.

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The Lede: What the CFTC’s Proposed Prediction Rules Say

Following a review by the Office of Information and Regulatory Affairs (OIRA), which is part of the White House Office of Management and Budget (OMB), the Commodity Futures Trading Commission (CFTC) released its proposed rules governing prediction markets on Wednesday. The 267 pages of rules are now in the public comment period.

Overall, the CFTC has decided that no contracts are off-limits unless it clears two bars:

Bar 1: It involves one of the named categories, including but not limited to War, Terrorism, Assassination, and Gaming.
Bar 2: If the answer to the above is yes, the CFTC must determine the contract is against the public interest.

The CFTC is also defining gaming in an interesting way:

“A definition that characterizes ‘gaming’ as a property of the event contract itself (for example, ‘the act of risking something of value, especially money, for a chance to win a prize’) cannot coherently be applied because it has no limiting principle. Under such a definition, every event contract would involve ‘gaming’ by definition, because every event contract stakes value on a contingent outcome.”

I’ll skip over the parts that cover “death” markets and other illicit activities and go right into sports, where the new rules do little to rein in sports contracts at prediction markets.

That said, they do nibble around the edges of what markets are acceptable, and perhaps (the language is still somewhat ambiguous, with lots of wiggle room, bolded below), prevent prediction markets from offering markets on games of chance:

“The Commission preliminarily believes that event contracts involving games whose outcome depends on random chance — by definition, devoid of informational content — would not advance any purposes of the CEA. For these reasons, under the Commission’s proposed factors, it would be highly likely that event contracts involving games that depend entirely on random chance would be found to be contrary to the public interest.”

Setting aside the caveated language, the new rules would seem to cover roulette (pure random chance), but not blackjack, as it specifically mentions poker and skillful decisions by the player.

And as Alex Ursa, Head of Gaming at Betr, noted, slot machines can be built on top of authorized products:

Given the current CFTC’s relationships and general attitude toward prediction markets, the newly proposed rules are the best possible outcome for the sports betting industry — the CFTC merely flipped the industry off with a shit-eating grin on its face — as it does put some guardrails in place, around injuries, officiating, and discrete actions/easily manipulable markets like first pitches.

I tend to agree with this assessment (because it could have been worse):

That said, the industry and prediction market naysayers are not overly happy with the rules (or the process).

Mick Mulvaney, Executive Director of Gambling is Not Investing:

“Let's call this what it is: sports betting.
“It is settled law that states and tribes are the rightful regulators of sports gambling. State and tribal officials have established thoughtful, voter-approved frameworks – complete with age minimums, consumer protections, integrity standards, and tax structures to support investment in community programs.
“Now the CFTC wants to supplant state and tribal law and anoint itself a national gaming regulator, allowing companies to simply route sports betting through federal commodities law and avoid the rules.
“If Wall Street can turn the Super Bowl, NBA Finals, and the World Cup into federally approved 'event contracts,' then every limit that lawmakers and regulators have placed on sports gambling becomes optional. The result will be more gambling, less accountability, and a direct challenge to state and tribal authority.
“The CFTC was created to oversee commodity markets, not to become the nation's sports betting regulator. Congress never intended for federal derivatives law to become a backdoor for unsafe sports gambling.
“This proposal deserves serious scrutiny from lawmakers, state officials, tribes, sports leagues, and anyone concerned about preserving the integrity of our gambling laws. A sports bet doesn't stop being a sports bet just because you call it a contract. If it quacks like a duck, it’s sports gambling.”

Bill Miller, president and CEO of the American Gaming Association:

“This is a remarkable attempt to redefine what constitutes sports betting. It makes a mockery of congressional intent while going against a bipartisan coalition of 41 Attorneys General, countless legislators across the country, and the 81% of voters who recognize that the so-called ‘prediction markets’ are backdoor sportsbooks evading state and tribal law.
“The consequences are real. ‘Prediction markets’ evasion of state and tribal laws is estimated to have already cost communities across the country more than $1 billion in sports betting tax revenue, hurting critical local projects. This siphoning will intensify as ‘prediction markets’ continue refusing to comply with state and tribal law.”

As an aside, this is a fair point by industry consultant Jessica Welman:

Although, one could argue that a lot of the “regulations” put in place by states fall somewhere between redundant and counterproductive.

Here’s more analysis worth taking a look at:

CFTC Posts Prediction Market Rules: What It Means for Sports [Dan Bernstein, Sportico]
CFTC Says Sports Contracts Are Gaming … But They’ll Be Legal Anyway [Daniel O’Boyle, InGame]
Feds move to formally allow sports “trading” on prediction markets [Nathan Bomey, Axios]
CFTC’s new draft rules allow most sports events contracts [Compliance+More]
Trump Regulator Proposes New Rules on What’s Allowed on Prediction Markets [Dylan Tokar, Wall Street Journal] 💲Paywall

Views: How Poker Turned Into Chess

This is Part 2 of a four-part series by Phillip Atkinson, the CEO of Unrational Games. The articles were originally published on X and are reprinted here with permission from the author.

The articles focus on the decline of online poker, but contain valuable insights into the modern gambling world, with many parallels to prediction markets.

Follow Phillip on X

You can read Part 1, Not Neutral, here.

Part 2: Not For Me

At some point, people stopped playing the same game.

I was introduced to poker in a pub in the North-East of England by a Cambridge graduate who had spent the morning filming a promotional video for a strip club. That’s the thing about poker (and gambling in general). You’re going to cross paths with any number of weird and interesting people from all walks of life. The one thing they have in common is that they’re trying to win your money.

And that’s fine. It’s the principle that underpins the game and drives the behaviour. Poker as a game is fun in itself, but there’s a clear difference between playing for money and playing for just enjoyment. Poker is an adversarial game, so players have always sought an edge on each other. The question, for the operators that host the games, is which edges to allow and at what point they unbalance the whole ecosystem.

If you want to see where that question led, watch Jonathan Tamayo’s repeated excursions to the rail at the 2024 WSOP main event to check with a solver whether he’d played the hand correctly in all-in situations. There are any number of angles to it (and plenty of people commented at the time), but the one that matters here is the perception it gives of the game. Imagine Tiger Woods hitting a key drive at the end of the Masters and then immediately running over to a Trackman to check spin rates, launch angles and whatever else. To the casual viewer, it would look weird and otherworldly. But that’s what poker evolved into.

Like chess, but

Where we are now is the predictable end of a trend that started well over a decade ago. It comes from how poker players think and how the sites make money. When online poker came along, new tools and approaches became possible. Mass multi-tabling with a strict mathematical approach became a viable route to the top VIP tiers. Heads-up displays, third-party databases that aggregated player behaviour, and increasingly sophisticated training sites gave players who knew how to use them an advantage against opponents they’d never played before. If you ever saw the screen of a top online player it would be unrecognisable next to the base setup, and new players, and people who were losing, notice when they appear to be playing a different game. Now we have complex solvers that can identify optimal actions in most situations, and poker theory is massively more detailed and comprehensive. The game evolved like chess, but with a monetary incentive to exploit disparities, and no Elo system to make them visible.

PokerStars used to struggle with how to handle this. I remember any number of group meetings, including some with Isai, about whichever tool had crossed the boundary of what was considered acceptable. Stars could have killed the entire third-party ecosystem by randomising table names, for instance, but doing so would have run straight into the tension I described in Not Neutral.

The players who put in the most money quite liked the advantage these tools gave them. They also generally fell under the category of skill tools, and the sites were quite fond of the notion that poker is a game of skill.

So you ended up with an uneasy truce that persists to this day. Each individual decision to permit third-party tools was defensible in isolation, but in aggregate they optimised the product around one cohort - the same cohort the people designing the product had mostly come from. The tooling around prediction markets is on a similar arc, if not at an even higher level of technical complexity. PMs today are roughly where poker was at the beginning of the boom years, and the operators are making the same choices about what to permit, with arguably more incentive to support the most sophisticated and well-resourced participants.

The good old days

Not long after that meeting in the pub, I found it was possible to be pretty successful in online poker just by dint of having read a Sklansky book, being moderately disciplined on starting hands, and being able to count fingers on both hands. It was a great time to be a player. Many of the people who yearn for the return of those days misunderstand what was actually happening, and why that period can never be repeated. Compare it to someone early in their poker journey today. A few weeks ago I was looking through a tournament course from one of the popular learning sites and compared to Sklansky-era thinking, it’s on another planet. Starting hand ranges. Nut and range advantages. How to play in almost all core scenarios across any street. Strategies for the decisive moments. The learning curve is vastly steeper, as is the depth of detail, but it’s probably table stakes for even having a chance these days. The same material would have made you almost unstoppable fifteen years ago.

Poker (the business) has always been about finding a balance along multiple, sometimes competing dimensions. One of its advantages over other verticals is that the game obscures the gap between players for a while, but it doesn’t do so for long. When the ecosystem supporting the dedicated and detail-oriented took an enormous leap forward, the gap between the averagely competent and the new player became a chasm.

The ‘recreationals’

The prevailing narrative in the industry has always separated the ‘recreational’ player from the ‘pro’, but most of the people who use the term ‘recreational’ or ‘casual’ wouldn’t recognise the perspective of such a player even if it were spelled out for them. Those players don’t need to lose money to leave. They just need to look at the game, and the vibe around it, and conclude it isn’t for them. A new player today, looking at the complexity of the solvers, the HUDs and the learning materials, would reasonably think they were at a massive disadvantage and had to go back to college to have a chance. That’s the opposite of the emotional resonance that things like the Moneymaker victory tapped into.

That’s really what it comes down to. Do people think they have a chance? The Jonathan Tamayos of the world definitely do. But what about the people at the base of the pyramid who support them? What about the people who just want to have fun?

Upcoming Webinar on The Gamblification of Everything

Gambling is everywhere and everything is gambling. Over the last few years, gambling has become a rapidly normalized part of American life, and sports betting is just the tip of the iceberg. From online casino games to wagering on drone strikes via prediction markets to slot-machine mechanics built into video games, Americans can find gambling and gambling-like games everywhere.

What is the spread of gambling doing to individuals and to society at large?
How much further could gambling go?

Join the American Institute for Boys and Men for a webinar to reckon with the new place of gambling in American life.

German Lopez (New York Times) will moderate a conversation featuring Kyla Scanlon (economic commentator), Matt King (Fanatics Betting and Gaming), and Jonathan Cohen (AIBM).