Pennsylvania Gaming Control Board (PGCB) Executive Director Kevin F. O’Toole has taken issue with the rise of sports betting in prediction markets. O’Toole claims the “increasing presence” of these markets poses a “significant threat” to Pennsylvania’s regulations.
In a letter to the CFTC, O’Toole urged the federal agency to look closely at the problems that could arise from the “dual-track system” that has emerged. States like Pennsylvania still must regulate sports betting but have no control over prediction markets, which are handled at the federal level because they are considered contracts.
Legal, state-regulated gaming provides strong consumer protection and RG tools. Elizabeth Lanza @PAGamingControl This important protection is noted in today’s RG Round Table. pic.twitter.com/s4xvMMDG6t
— American Gaming Association (@AmericanGaming) September 30, 2025
Prediction markets like Kalshi and Polymarket have seen a significant increase in popularity over the past couple of years. However, although it was originally a mix of user-made and company-made bets, Kalshi has been trying to launch sports betting for some time.
In its full launch of NFL bets, its first week generated $441 million. By comparison, this is the equivalent of what was made during the US election season. The company has also witnessed a transformation Partner with FOX’s NFL coverage.
O’Toole says prediction markets are a problem for Penn State
However, O’Toole and the PGCB see the creeping prediction market as problematic, because although it is clearly a gamble, the classification means the PGCB cannot regulate it. Quoted from the letter, O’Toole He writes: “Sports prediction markets operate under the assertion that they are financial derivatives, or swaps, and therefore claim not to engage in gambling under state law.
“These markets effectively create a back door to legal sports betting, operating parallel to, but outside of, the state-regulated system, and without strict oversight.”
It should be noted that he is a candidate to head the Commodity Futures Trading Commission (CFTC). Brian Quentins His position has not yet been confirmed. There have been some delays and postponements, and now it appears the Trump administration is looking elsewhere. Quintenz is on Kalshi’s board of directors. However, there could be another option, which is Josh Sterling. Sterling is known for his defense of prediction markets, having represented Calci against the Commodity Futures Trading Commission (CFTC).
Also on Calci’s board is Donald Trump Jr., the president’s son. He was the subject of ridicule in the final episode of South Park, which aired a parody of market forecasts.
O’Toole also says the federal government should not handle such small contracts on an individual basis. It also leaves a lot to be desired in terms of consumer protection, which is raised in the letter:
“The clash between jurisdictions carries a significant risk of resulting in inconsistent and inadequate regulation.
“The CFTC’s framework is designed for derivatives markets that often involve sophisticated institutional participants. In turn, state gaming regulators prioritize consumer protection for the public, implementing detailed measures for responsible gaming, age verification, and problem gambling prevention.”
Featured Image: Pennsylvania Gaming Control Board
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