California banned blackjack-style and player-dealer games from its card rooms and casinos on April 1, and it is far from alone. Across the country, at least 28 states are now pursuing legislation to restrict, regulate, or outright ban various forms of gambling, from sweepstakes casinos and prediction markets to micro-bets on live sporting events, The US Sun reported.
The wave of state action marks a sharp turn from the years of rapid gambling expansion that followed the Supreme Court's 2018 decision opening the door to legal sports betting. Legislators in red and blue states alike are now scrambling to rein in an industry that has outpaced the regulatory frameworks meant to oversee it.
The scope is broad. States including Indiana, Louisiana, Maine, Maryland, Mississippi, Oklahoma, Virginia, and California have filed legislation targeting sweepstakes and social casinos. Some of these bills would outlaw even platforms that offer only free virtual currency and never let users spend real money, a sign that lawmakers view the gambling-adjacent business model itself as a threat, not just the financial transactions.
Not every state wants a blanket prohibition. New Jersey and Wyoming are taking a different path, seeking to regulate and tax sweepstakes-style casino platforms rather than shut them down entirely. The distinction matters: banning creates black markets, while taxing creates revenue streams and at least some consumer protection.
But the states pushing outright bans clearly believe the risks outweigh the revenue. When even free-play platforms land on the chopping block, the message from state capitols is that the gambling industry's creative rebranding, "social casinos," "sweepstakes", has not fooled the people writing the laws.
As we noted when California's blackjack-style regulations took effect April 1, that state's crackdown on card-room games set a precedent for aggressive enforcement at the state level. Now the pattern is spreading.
Prediction markets, platforms like Kalshi and Polymarket that let users wager on real-world outcomes, face a growing patchwork of state opposition. Connecticut wants to prevent anyone under 21 from using prediction market platforms. Hawaiian legislators want to ban them altogether by July 2026 if their bill passes.
The federal government, however, is moving in the opposite direction. CFTC Chairman Michael Selig has made clear the Trump administration will back Kalshi and Polymarket against states trying to block them, arguing that federal oversight of these markets preempts state-level gambling prohibitions. In a Wall Street Journal op-ed, Selig wrote:
"The CFTC will no longer sit idly by while overzealous state governments undermine the agency's exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products."
Selig went further in a video statement: "To those who seek to challenge our authority in this space, let me be clear, we will see you in court." Several states, including Nevada, have already sued or taken enforcement action against prediction market platforms, arguing they operate unlicensed gambling businesses.
The legal collision is straightforward. States say prediction markets are gambling and fall under their authority. The CFTC says they are federally regulated financial instruments. If the federal position prevails, it could significantly limit states' ability to enforce their own gambling laws, a question with real constitutional weight for anyone who values federalism.
The broader legislative pressure on prediction markets has been building for months, with bipartisan concern about the platforms' rapid growth and thin oversight.
New Jersey's proposed "micro-bets" ban targets play-by-play wagering, the kind of rapid-fire, in-game betting designed to keep users clicking. The stated goal is to combat impulsive gambling behavior. Anyone who has watched a live sporting event on a phone while a sportsbook app pings notifications every thirty seconds understands the concern.
Indiana is taking aim at a different problem: proposition bets on individual college athletes' performances. The Indiana House wants to prohibit licensed sportsbooks from offering those wagers. Tennessee, meanwhile, wants to restrict sports betting on college campuses specifically.
Both moves reflect a growing unease with the intersection of gambling and amateur athletics. College athletes do not get a cut of the betting handle. They do get the harassment, the social-media threats, and the pressure that come when gamblers lose money on a missed free throw or a dropped pass. Protecting those athletes, and the campuses where they study, is a straightforward exercise of state authority.
The scrutiny is not limited to sports betting. Lawmakers have also raised concerns about insider trading risks on prediction market contracts tied to geopolitical events, adding another dimension to the regulatory debate.
Several states are not just restricting gambling, they are building the bureaucratic infrastructure to manage it. Alaska, Hawaii, Illinois, Louisiana, Mississippi, Ohio, Texas, Virginia, and West Virginia have all filed bills in 2026 addressing mobile sports betting, Daily Fantasy Sports, and general online casinos. Some of these bills would tax already-approved forms of gambling. Others seek to authorize new gambling methods and set tax rates simultaneously.
North Carolina is creating a new commission to regulate certain slot machines that will be introduced in retail locations across the state. The details remain vague, what qualifies as "certain slot machines" is not spelled out, but the direction is clear: more machines, more oversight, more state involvement.
Florida, Georgia, Hawaii, and Iowa have enacted general guidelines around gambling, though the specifics of those guidelines are not detailed. The trend line across all of these states points the same way: the era of letting the gambling industry write its own rules is ending.
The gambling industry's expansion over the past several years has been staggering. Mobile apps turned every smartphone into a casino. Sweepstakes platforms found loopholes in state law. Prediction markets rebranded wagering as "information discovery." And through it all, the people who bore the cost, problem gamblers, their families, young people drawn in by slick marketing, had little protection.
States are now trying to catch up. Whether they do it through bans, taxes, age restrictions, or new regulatory commissions, the impulse is the same: reassert public authority over an industry that grew faster than the law could follow. The National Gambling Helpline (1-800-522-4700) and the National Council on Problem Gambling exist because the human cost of unregulated gambling is not theoretical. It is measurable and it is growing.
The tension between state gambling restrictions and the CFTC's assertion of federal preemption over prediction markets will likely end up in court, possibly more than once. How that fight resolves will shape not just the gambling landscape but the broader question of whether states retain meaningful authority to protect their own citizens from industries that operate across state lines through a phone screen.
For conservatives who believe in federalism and local self-governance, the answer should be obvious. States that want to protect their residents from predatory gambling practices should not need permission from Washington to do it. And an industry that spent years exploiting every regulatory gap it could find has no standing to complain when the gaps start closing.