West Virginia Lawmaker Likens Prediction Markets To Moonshine
Del. Shawn Fluharty told a Global Gaming Expo panel that unregulated prediction markets lack the oversight of licensed sports betting, as courts and the CFTC weigh who should police them.
A West Virginia state lawmaker used a G2E panel to argue that prediction markets are a rough, unregulated product compared with the polished business of legal sports betting.
Del. Shawn Fluharty, a Democrat in the West Virginia House of Delegates who also serves as head of government affairs for Play'n GO, drew the comparison during a Global Gaming Expo session on prediction markets, regulatory oversight and game integrity, according to Legal Sports Report, which cited reporting from CDC Gaming.
Fluharty described legal sports betting as a fine wine and prediction markets as their rougher cousin. "It's basically moonshine," he said, according to CDC Gaming. "It's not licensed. It's not regulated. It's great for tailgates, maybe, but you don't know what the hell you're getting."
Fluharty led the National Council of Legislators from Gaming States as president from 2023 until July, when Georgia state Rep. Al Williams succeeded him.
His remarks land as the question of who regulates sports event contracts appears likely to reach the U.S. Supreme Court. Prediction market operator Kalshi, which operates under federal commodities rules, has lost repeatedly in state courts over recent months.
Those losses include a unanimous Sixth Circuit ruling permitting Ohio and Tennessee to apply their own sports betting statutes against Kalshi. The company also lost a separate case last week requiring it to geofence around three tribal reservations in California, adding to seven states where it was already barred from offering sports event contracts.
Kalshi retains a favourable ruling from the Third Circuit issued in April, which led New Jersey to ask the Supreme Court to take up the dispute. Gaming attorney Daniel Wallach has counted 38 state victories out of 43 rulings covering preliminary injunctions, temporary restraining orders and stays pending appeal.
Fluharty argued that states, not federal regulators, are best placed to set the guardrails for gaming. "The states are the adults in the room and they should be responsible for implementing gaming and policing it and putting the guardrails in place," he said, adding, "Not the federal government. Come on! Have you seen their polling numbers lately?"
The federal regulator at the centre of the dispute, the Commodity Futures Trading Commission, has lost a quarter of its staff since January 2025, prompting Sen. Elizabeth Warren to call for an investigation into the cuts.
At the CFTC's first Innovation Advisory Committee meeting last month, CME Group chief executive Terry Duffy said prediction operators have filed 2,500 self-certifications, none of which have faced opposition from the agency.
Duffy also raised concerns over so-called mention markets, which allow users to trade on whether a public figure will utter a particular word or phrase, suggesting some such contracts may fall foul of the requirement that listed products not be easily manipulated. The CFTC issued an advisory last week warning that mention market contracts carry heightened manipulation risk and must meet a higher threshold before being listed.
On consumer protection, American Gaming Association vice president of government relations Tres York told the same G2E panel that prediction markets lag behind licensed sportsbooks, which must offer tools such as deposit limits and self-exclusion and generally require bettors to be 21, compared with a minimum age of 18 on many prediction platforms.
"States have implemented a lot of consumer-protection aspects that I don't think prediction markets have implemented, if at all, not nearly to the same extent, and it can cause a lot of harm to those people," York said, according to CDC Gaming.