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North American lottery association claims prediction market trading poses ‘variety of threats’

Legal Writer

Publish Date: Jul 23, 2026

Fact checked by: Matt Moreno

Key Points

The North American State and Provincial Lottery Association released a statement urging lawmakers to regulate event contract trading as gambling
Statement says that event contract trading threatens consumers, law enforcement, and public funding
Organization cited paper warning of prediction market exchanges replicating lottery draws

The North American State and Provincial Lottery Association, a trade group for public lotteries in Canada and the United States of America, made its position on event contract trading clear on Tuesday. The statement calls prediction market exchanges a form of gambling and stresses that provincial and state governments must regulate the trading on those platforms as such.

The release claims that lost revenue for those governments is a current and mounting concern. A paper that the statement cites also gave voice to fears about exchanges launching their own lottery-style games.

(Photo by Karl-Josef Hildenbrand/picture alliance via Getty Images)

NASPL: Event contract trading is gambling

Numerous court cases across the United States are litigating exactly how governmental bodies should treat event contract trading. The North American State and Provincial Lottery Association (NASPL) says that the situation is clear, though.

“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.”

To aid provincial and state governments in adjudication, the NASPL recommends a test.

“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.”

Because that standard would make event contract trading a form of gambling, the NASPL argues, “it must be licensed and regulated as such.” That regulation could include preventing exchanges from creating markets that resemble the draw-style games that lotteries across Canada and the U.S. owe their popularity to.

Statement cites WLA paper that voiced cannibalization concerns

In the statement, the NASPL referenced a position paper from the World Lottery Association (WLA) entitled, “Prediction Markets: Unlicensed Betting by Another Name.” That paper suggests that cannibalization fears for lotteries are greater than players simply choosing to trade event contracts rather than buy chances in their draws.

“From a functional perspective, lottery draws are compatible with prediction market structures. ... In this context, their inclusion would represent a natural extension of existing prediction market offerings, rather than a qualitative change in product design.”

In other words, the WLA is concerned that exchanges could start offering markets that are functionally equivalent to draw-style games that member lotteries offer. At this point, no exchanges registered with the federal government in the U.S. provide this type of market.

The paper states that the ideal way to prevent that is for governments to “close regulatory gaps and ensure prediction markets are subject to the same licensing, integrity, return to society and consumer protection standards as betting.”

The NASPL echoed that call and voiced its beliefs about what failure to do so would produce. The statement says that “failing to establish appropriate regulatory parameters around event contracts will have a negative impact on the integrity of games, as well as compromise consumer protection and responsible gaming efforts and increase the challenges that law enforcement faces in attempting to combat tax evasion, money laundering, and racketeering.”

Many state attorneys general and gambling regulators have voiced similar concerns, some of which are being put forward in courthouses throughout the U.S. The NASPL has made it clear that they would consider wins for those state governments wins for their members as well.

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