Industry Leaders Call for Federal Regulation of Sports Betting as Financial Product
At Consensus Miami 2026, Jacob Fortinsky, CEO of Novig, and Adam Mastrelli, founder of 57 Maiden, argued that sports betting should be regulated as a federal financial product rather than a state-level gambling activity. Fortinsky critiqued the current sportsbook model for banning successful bettors, stating that sports event contracts are binary financial instruments. Mastrelli shared his personal experience of being banned from major sportsbooks for being a sharp trader, leading his firm to use Novig's platform. Novig plans to transition to a federal Designated Contract Market (DCM) framework this summer, expanding from 35 to all 50 states. The panel highlighted the structural issues with state-based regulation, where regulators prioritize tax revenue over consumer protection and innovation. Fortinsky noted an earlier attempt to obtain a state license in Colorado failed, with regulators admitting they did not prioritize market efficiency. He predicted that the jurisdictional conflict between federal and state authorities would reach the Supreme Court within two to three years, citing 15 pending lawsuits involving the CFTC, Kalshi, Robinhood, and states. For wallet and key holders, this shift could impact how they engage with prediction markets and sports betting platforms. The move toward federal regulation under a DCM framework may offer more consistent consumer protections and reduce the risk of fund freezes or account bans. However, increased regulatory oversight could also introduce compliance requirements that affect platform operations. Users should monitor the legal developments and consider the security of their assets when choosing platforms that align with federal standards.
Key facts
- Novig CEO Jacob Fortinsky advocates for federal regulation of sports betting as financial products.
- 57 Maiden's Adam Mastrelli was banned from two major sportsbooks for being a sharp bettor.
- Novig plans to transition to a federal DCM framework, expanding to all 50 states.
- Fortinsky predicts the federal-state jurisdictional fight will reach the Supreme Court.
- Panelists argue state regulators prioritize tax revenue over consumer protection.