Gaming Industry Pushes Congress to Block Sports Betting on Prediction Markets

A coalition of gaming groups, tribal nations, and labor unions is urging the Senate to block prediction market platforms from offering sports and casino-style contracts.

In a June 16 letter, the groups asked lawmakers to add language to the Digital Asset Market Clarity Act, arguing the platforms expand gambling without following state regulations.

A Unified Front Across a Divided Industry

The gaming industry often disagrees on policy issues, but this letter brought together a wide range of groups. Signers include the American Gaming Association, which represents commercial casinos, and the Indian Gaming Association, which represents tribal gaming interests.

The coalition says prediction markets have created what it calls the largest expansion of gambling in U.S. history over the past 18 months. According to the groups, this growth happened without approval from voters or lawmakers.

By raising the issue now, the coalition is asking senators to view the crypto bill as more than just financial legislation. They want lawmakers to consider its impact on gambling regulation as well.

The Core Argument: Federal Label, State-Sized Loophole

The coalition’s main concern is that prediction market platforms operate under federal financial rules instead of state gambling laws.

Because of this, the platforms can offer contracts tied to sports outcomes across the country, even in states where sports betting is unregulated or heavily restricted.

Sportsbooks such as DraftKings and FanDuel must get licenses in every state where they operate. They also have to follow local consumer protection rules and pay state taxes. Prediction market platforms do not face those same requirements because they are regulated under a different federal framework.

The coalition also says these platforms may allow users as young as 18 to participate in states that have not approved sports betting for regulation. In addition, the groups argue that prediction markets do not provide the same responsible gambling protections required of regulated sportsbooks. They claim marketing these products as investments instead of gambling could be especially misleading to younger users.

CFTC Called Out as Wrong Regulator for Sports Wagering

The coalition also criticized the Commodity Futures Trading Commission (CFTC), the federal agency responsible for overseeing prediction markets.

According to the letter, the CFTC was created to regulate commodities and financial markets, not sports betting. The groups argue that the agency lacks the experience and resources needed to oversee gambling activity on a national scale.

They believe sports betting falls outside the CFTC’s intended role and should not be offered through prediction market platforms, regardless of how the products are labeled.

The Clarity Act Already Faces a Tough Road, and What’s Next

The Digital Asset Market Clarity Act is already facing several challenges in Congress. Lawmakers still need to settle ethics concerns, combine different versions of the bill, and secure enough votes in the Senate.

With limited time before Congress takes a recess, some analysts believe meeting a July 4 target date will be difficult.

This is not the first attempt to address sports event contracts. In March, Senators Adam Schiff and John Curtis introduced separate legislation that would ban sports and casino contracts on prediction market platforms. The gaming coalition is now asking lawmakers to include similar language in the Clarity Act.

The Senate must decide whether to add the gaming industry’s proposed changes to the bill or move forward without them.

If lawmakers approve the amendment, it would be a major win for traditional gaming companies and tribal nations that operate under state-regulated systems. If not, the issue will likely continue through separate legislation, and pressure on federal regulators to define the limits of prediction markets is expected to grow.