Kevin F. O’Toole, Executive Director of the Pennsylvania Gaming Control Board (PGCB), has sent a letter to the state’s two U.S. Senators and 17 members of Congress to raise concerns about sports wagering through private futures markets, also known as “event contracts.”

O’Toole states that these sports prediction markets pose a significant threat to Pennsylvania’s carefully crafted regulatory framework, which is designed to protect players and ensure transparency in legal sports betting.

Risks of Sports Prediction Markets

In his letter, O’Toole explains that these markets operate under the classification of financial derivatives, bypassing state gambling laws. This creates a “backdoor” for sports betting to function parallel to the legal system, without the strict oversight that state-regulated markets enforce.

“These markets create a parallel entry to legal betting, without the consumer protections that states require,” O’Toole writes.

Consumer Protection and State Regulation

Following the U.S. Supreme Court’s repeal of the Professional and Amateur Sports Protection Act (PAPSA) in 2018, Pennsylvania launched a legal sports wagering system with licensed operators, age verification, and strict regulations to protect the public.

Futures markets under the Commodity Futures Trading Commission (CFTC) do not mandate the same consumer safeguards, as they were historically designed for sophisticated investors, not individual bettors, increasing the risk of exposure and insider exploitation.

Jurisdictional Conflicts and Player Risks

O’Toole warns that running state-regulated markets alongside federal futures markets could result in player confusion and inconsistent regulation:

Reduced oversight on match-fixing or insider trading

Exposure of bettors to markets with lower consumer protections

Creation of a parallel ecosystem that appears regulated but operates like the “wild west”

“The state system works exceptionally well, and replicating it federally would take years, creating redundancy and risk for players,” O’Toole concludes.

A copy of Kevin F. O’Toole’s letter is available as part of the official Pennsylvania Gaming Control Board release.