Several leading gambling industry organizations have renewed efforts to prevent prediction market platforms from offering sports-related event contracts, arguing that the products function as sports betting while operating outside established state and tribal regulatory systems.
A coalition that includes the American Gaming Association (AGA), the Indian Gaming Association (IGA), and the Association of Gaming Equipment Manufacturers has urged members of the US Senate to amend pending legislation and clarify that sports betting and casino-style wagering cannot be offered through federally regulated prediction market platforms.
The request comes as Congress debates the Digital Asset Clarity Act, legislation that would place digital assets such as cryptocurrencies and stablecoins under the jurisdiction of the Commodity Futures Trading Commission (CFTC). The Senate Banking Committee recently voted 15-9 to advance the bill to the Senate floor.
Industry Raises Concerns Over Market Growth
The gaming organizations argue that prediction market operators have expanded rapidly over the past 18 months, with sports contracts representing a significant share of activity.
According to the letter, these products allow companies to offer sports wagering nationwide while bypassing state and tribal regulatory frameworks.
“By offering nationwide sports betting through so-called ‘sports event contracts’ and branding it as a federally regulated financial product, these platforms have bypassed state and tribal law, weakened consumer protections, and undercut a system built on local control – one that supports jobs, generates tax revenue, and funds community priorities,” the letter reads.
The groups also warned that event contracts are often promoted as investment products rather than gambling activities, potentially exposing younger users to greater risks. They further argued that the CFTC “lacks both expertise and infrastructure” to regulate gambling products.
Regulatory Debate Intensifies
The dispute follows major changes in the US betting market after the Supreme Court’s 2018 decision allowing states to legalize sports betting. Today, 39 states and Washington, D.C. offer some form of legal sports wagering.
Prediction markets traditionally focused on financial and political outcomes. In early 2025, Kalshi began offering sports event contracts, prompting other operators to launch similar products. Some sports betting companies also introduced prediction market offerings.
Kalshi General Counsel and Chief Regulatory Officer Rick Heaslip has said sports event contracts account for roughly 70% of the platform’s trading volume.
State regulators and tribal authorities have challenged several prediction market products, resulting in numerous legal disputes over their status under existing gambling laws.
Push for Legislative Clarification
The gaming groups asked Congress to include “explicit language to make it crystal clear that sports betting and casino-style gambling cannot be conducted nationwide through federally registered platforms under the guise of ‘event contracts.’”
Their latest appeal follows earlier communications with lawmakers and references recent developments, including a Senate decision barring members and staff from trading on prediction market platforms. The organizations also highlighted the bipartisan Prediction Markets Are Gambling Act, which seeks to prohibit sports event contracts and casino-style games on prediction market platforms.
Meanwhile, the CFTC has proposed rules that would generally permit sports-related prediction markets while restricting contracts considered vulnerable to manipulation or contrary to the public interest.
Source:
“Gaming industry groups look to Congress for ban on sports-event contracts”, completeigaming.com. Jun 17, 2026
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