Andreessen Horowitz has expressed support for federal regulation of prediction markets in an 18-page letter submitted to the Commodity Futures Trading Commission (CFTC) on May 2. According to NS3.AI, the firm opposes state-level restrictions, arguing that state cease-and-desist orders and proposed bans could compel platforms to block users based on their state, thereby reducing market liquidity. The debate revolves around whether platforms like Kalshi and Polymarket should be regulated under federal swaps oversight or state gambling laws.