Key facts
- Gaming industry groups, tribes, and unions are lobbying Congress to ban sports prediction markets within a crypto bill.
- They argue these markets represent an unregulated expansion of gambling, bypassing state and tribal laws and consumer protections.
- The American Gaming Association estimates states have lost $1.08 billion in tax dollars to prediction markets since early 2025.
- The CFTC currently views trading on sports outcomes on these platforms as a financial investment activity.
Gaming industry groups, alongside tribes and unions, are pressing Congress to include provisions in upcoming cryptocurrency legislation that would prohibit sports prediction markets. These organizations argue that platforms like Kalshi and Polymarket are facilitating a significant and unregulated expansion of gambling, operating as "backdoor sports betting operations" that bypass consumer protections and state regulatory frameworks.
The American Gaming Association (AGA) has stated that these prediction markets have led to the largest expansion of gambling in U.S. history over the past 18 months without voter approval or legislative authorization. The AGA estimates that states have lost $1.08 billion in tax dollars to these markets since the beginning of 2025.
During testimony before a Senate subcommittee, AGA President and CEO Bill Miller asserted that sports event contracts on prediction markets function as sports betting, repackaged as financial products to circumvent responsible gaming standards and regulatory systems. The Commodities Futures Trading Commission (CFTC), which oversees prediction markets, has previously maintained that trading on sports outcomes constitutes a financial investment activity.