“It’s not a slam dunk at all.” 

A blunt assessment from former Commodity Futures Trading Commission Special Counsel Peter Sanchez Guarda cuts through the noise around an intensifying legal fight that could redraw the line between finance and gambling in the United States.

Guarda, who now runs Peter Sanchez Guarda Consulting and Turnkey Family Office, points to a moment of real uncertainty as federal agencies take the unusual step of suing several states, including Arizona, Connecticut, and Illinois.

He describes an environment shaped by a business-friendly federal posture toward emerging financial models. “The current administration has signaled that it is very pro-business and wants to make it as easy as possible for these new fintech business models such as prediction markets and crypto to operate,” Guarda said. He also noted the unusual makeup of the regulator itself. “The CFTC has only one person on the five-member commission now, so it’s easier for him to enact his agenda if there is no chance of being outvoted.”

Federal regulators CFTC and DOJ supports prediction markets in fight against states

The lawsuits come after states escalated enforcement against platforms like Kalshi, issuing cease-and-desist orders and, in Arizona, pursuing criminal charges tied to sports-event contracts. There appears to be a fundamental disagreement as states argue these products amount to illegal gambling, while federal regulators insist they are legitimate derivatives governed under federal law, and therefore beyond the reach of state gaming regimes.