Mick Mulvaney wants to be clear: He really likes gambling. “You’re talking to the only former member of Congress who’s won a poker tournament in Las Vegas,” he tells WIRED. When he was representing South Carolina in the US House of Representatives, he pushed for the state to allow sports betting.
Because of his background, Mulvaney, a former Trump administration official, says he can tell when something is gambling—and that the sports contracts on prediction markets fit the bill. “You know the old saying, if it walks like a duck and quacks like a duck, it’s a duck?” he asks. “If it looks like a sports bet, if it sounds like a sports bet, if it pays off like a sports bet, if it’s on a sporting event—it’s a sports bet.”
Mulvaney, who was President Trump’s acting White House chief of staff from 2019 to 2020, is now leading a new advocacy coalition called Gambling Is Not Investing, which will lobby for prediction markets to be regulated by state gambling laws. He joins a number of other prominent Republicans calling for similar rules. Earlier this month, former New Jersey Governor Chris Christie and current Utah Governor Spencer Cox both spoke out against the current federal approach to regulating prediction markets. (Christie also used the “quack like a duck” line.)
These developments are part of a fierce political battle over how prediction markets are regulated. On the federal level, the Commodity Futures Trading Commission (CFTC) oversees these platforms, which are currently classified as derivatives markets. While a traditional sportsbook will offer customers a chance to place a bet on which team will win or lose a game, a prediction market will offer an “event contract” on the outcome. Critics view the difference as little more than a loophole, and state authorities from across the country are currently pursuing lawsuits against prediction market companies like Kalshi, alleging that they violate state gambling laws. (While these markets offer event contracts on a wide variety of topics, sporting events are their most popular offerings.) “I love the CFTC, but they’re not set up to do this,” says Mulvaney.
Recently, a group of 23 Democratic Senators sent the CFTC a letter urging it to allow these court cases to play out. It did not appear to go over well; CFTC head Michael Selig insists that prediction markets are correctly classified, and that his agency has jurisdiction over the industry. After Selig released a video promising to see those who “challenge our authority” in court, the CFTC even took the unprecedented step of filing a brief in support of the cryptocurrency platform Crypto.com, which faces a lawsuit from Nevada regulators over its prediction market offering.
During the Biden Administration, the CFTC took a notably different approach to prediction markets, even fining Polymarket $1.4 million for failing to register as a derivatives market and temporarily blocking it from operating in the US.
Now, though, the agency’s friendlier approach appears to dovetail with the White House’s interest in the industry. The Trumps have numerous ties to the prediction market world. Truth Social, the social media platform majority-owned by President Trump and his family, is planning its own prediction market offering, reportedly called Truth Predict. Donald Trump Jr is an advisor to both Kalshi and Polymarket, and his venture capital firm has invested in the latter.
But the launch of Gambling Not Investing demonstrates that there is a growing wing of the Republican party that feels the prediction markets need more guardrails. Its founding member organizations include a number of conservative consumer advocacy groups, including Moms for America, Consumer Action for a Strong Economy, and Frontiers of Freedom.
Mulvaney is hopeful that he can make his case to the current White House. “Their default position is going to be to regulate less, not more. And I respect that,” he says. “But I also know that in the first Trump administration, when there were common sense reasons to do some regulation, that we did that.”
Source: www.wired.com
