Former US Senator Blanche Lincoln, who chaired the Senate Agriculture Committee that drafted the 2010 Dodd-Frank Act, has drawn sharp criticism for apparently reversing her long-standing position on the regulation of prediction markets.
Now serving as a paid lobbyist for Kalshi, Lincoln submitted comments to the Commodity Futures Trading Commission (CFTC) last week urging the agency to assert its exclusive jurisdiction over all prediction markets, including those involving events such as sports.
Gaming lawyer and analyst Daniel Wallach pointed out the apparent change of opinion in a LinkedIn post, detailing how Lincoln’s statements stand in stark contrast to the legislative record she helped shape 15 years ago.
In 2010, the Dodd-Frank Act warned that the CFTC must be empowered to block “derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed ‘event contracts.’”
The Act also dismissed the legitimacy of prediction markets based on sporting events, arguing such contracts would “not serve any real commercial purpose” and instead function solely as gambling instruments.
However, in her 2025 submission to the derivatives regulator, Lincoln claimed that prediction markets are now under threat from recent efforts by states to block certain markets.
These, she said, are “federally regulated futures contracts that traders use to predict the outcomes of closely watched events.”
If states were to succeed in blocking prediction markets based on sporting outcomes, she argued, it “could establish a damaging precedent where states feel empowered to block all sorts of contracts,” and would represent a “grave mistake”.
She further argued that events like the Super Bowl have “strong commercial value,” citing their influence on advertising, merchandise, and hospitality sectors, in an effort to justify Kalshi’s offering of event contracts tied to sports outcomes.
“We should not open up our regulatory structure to a chaotic system where states and other jurisdictions reject contracts at will,” she concluded.
This appears to reveal a shift in Lincoln’s stance over time. Her lobbying seeks to preempt state-level interference, pushing for the CFTC to maintain exclusive jurisdiction over all prediction markets, a position that could effectively invalidate state efforts to classify some markets as illegal wagering.
Prediction market debate still going strong
The comments come as CFTC-regulated Kalshi continues to face mounting challenges in several states, notably Nevada and New Jersey.
Nevada regulators have asserted that many of Kalshi’s markets resemble traditional sports betting in legal challenges against the operator.
New Jersey officials have likewise scrutinised the company’s operations within its jurisdiction, citing potential violations of state gaming laws.
These states argue that prediction markets blur the line between regulated futures contracts and unlicensed gambling.
Other states are monitoring the situation, as well, as the legal distinction between betting and commodities trading becomes increasingly blurred.
The core conundrum lies in determining whether event-based contracts, especially those tied to political or sporting outcomes, should be regulated under federal commodities law or subject to state gambling restrictions.
Kalshi’s supporters argue that federal preemption is necessary to prevent a fragmented legal environment.
Critics, however, see the push as an attempt to obfuscate state laws that were designed to eliminate unregulated betting.
The situation presents a salient test of how emerging financial instruments will be classified amid the continued proliferation of prediction markets.