MIAMI BEACH, Fla. – Sports betting should be regulated as a federal financial product rather than a state-licensed casino product, two panelists said Thursday.
Speaking at Consensus Miami 2026, Jacob Fortinsky, co-founder and CEO of sports betting platform Novig, said the old sportsbook model is structurally broken because it treats winning players as cheaters.
“Sports betting is really the only industry in the country that regularly limits and bans their superusers,” Fortinsky said. He framed sports event contracts as binary financial instruments that “for so long have been treated as a gambling product and should really be treated as a financial product instead.” Globally, he said, sports betting is “a $2 trillion asset class that’s still dominated by these old casinos.”
Adam Mastrelli, founder of 57 Maiden, a firm that builds AI-powered trading strategies for prediction markets, validated the criticism with personal experience.
“My partner and I were kicked out of two major sportsbooks within two months of trading because we were sharp,” he said. It’s like “LeBron James getting kicked out of the NBA for being too good,” he added.
Mastrelli said the team approached Novig, which he said does not charge fees and allows traders to set up synthetic positions.
Mastrelli said his firm’s lead was rapidly diminishing, and of 154 suggested trading strategies, only three are currently running profitably.
“That edge is going to go away,” he said, “so if you can build systems that can keep up with that edge and that alpha… it’s going to be really, really exciting.” His most profitable season, he said, was the WNBA.
Fortinsky said Novig is on track to transition this summer from a lottery model live in 35 states to a federal DCM framework that will let it operate in all 50 states. An earlier attempt to be regulated at the state level in Colorado, he said, was a wake-up call. “Regulators essentially told us that you’re naive if you think we care about consumer protection or innovation or market efficiency. We really just care about our tax revenue,” he said.
The federal-state battle, Fortinsky added, “will come to the Supreme Court in the next two or three years,” with 15 pending lawsuits between the Commodity Futures Trading Commission, Kalshi, Robinhood and various states. In prediction markets, he argued that sports is “counterintuitively actually the safest vertical”, given the larger concerns about insider trading and manipulation around political and event-driven contracts.
Mastrelli, who said he avoids offshore platforms altogether, compared prediction markets to stock markets: “When I see a robust stock market now, this is AQR against SIG. It’s not going away.”
