Gambling Industry Urges Action Against Sports Event Contracts

• According to a Semafor report, several gambling industry organizations are urging the U.S. Senate to take action against sports event contracts
• Groups reportedly sent a letter to the U.S. Senate asking for language to be included in legislation to prohibit sports and casino-style gaming contracts
• American Gaming Association, North American Gaming Regulators, and Indian Gaming Association reportedly signed the letter

Several national gaming, sports betting, and tribal associations are reportedly urging the U.S. Senate to take action against sports and casino-style event contracts.

According to a report from Semafor, several organizations within the gaming industry sent a letter to the U.S. Senate asking for language to prohibit prediction market sports and casino-style event contracts in crypto market structure legislation.

“The undersigned urge the Senate to include language in crypto market structure legislation that explicitly prohibits event contracts tied to sports and casino-style gaming. While our organizations may differ on other issues, including gambling policy, we are united in our concern that prediction markets have fueled the largest expansion of gambling in U.S. history over the past 18 months—without voter approval or legislative authorization,” the groups wrote in the letter.

Banding Together Against Sports Contracts

National, tribal, state, and labor group associations sent the letter to the U.S. Senate earlier this week, asking for a specific prohibition on any event contracts related to sports or casino-style games.

The American Gaming Association, National Thoroughbred Racing Association, Indian Gaming Association, National Congress of American Indians, and several state gaming associations signed the letter in support of the proposed prohibition.

“The CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering. It lacks both the expertise and the infrastructure to police nationwide sports betting, particularly when robust state and tribal regulatory systems already exist. Litigation may eventually clarify the law, but this is ultimately a question of congressional intent. Congress should not wait while this nationwide expansion of gambling continues. It should use crypto legislation to reaffirm a simple principle: sports betting falls outside the CFTC’s remit and cannot be offered through prediction market platforms,” the groups wrote.

Prediction market operators offering sports and casino-style event contracts bypass state and tribal laws, weakening consumer protections, and undercut a system built on state and tribal control, the groups note.

Language should be included in crypto legislation to reaffirm that sports betting and casino games fall outside the Commodity Futures Trading Commission’s (CFTC) overview and cannot be offered by prediction market platforms.

Legal Battle Continues in U.S.

While the gambling and tribal associations have asked for federal help to deal with these contracts, the legal battle for their regulatory control still rages on in the U.S. through a number of state and federal lawsuits.

Just this week the CFTC filed a lawsuit against New Mexico and its Attorney General Raúl Torrez. The CFTC filed its lawsuit in U.S. District Court for the District of New Mexico, seeking a declaratory judgement that federal law grants the CFTC exclusive authority to regulate event contracts.

The CFTC lawsuit was in direct response to a lawsuit filed on June 4 by Torrez and the New Mexico Department of Justice against prediction market operator Kalshi. The commission now has active lawsuits in eight states across the country to preserve its regulatory authority over prediction markets and sports event contracts.

The CFTC asserts the Commodity Exchange Act (CEA) has provided the commission with “exclusive jurisdiction” to regulate futures, options, and swaps traded on federally regulated exchanges. The CFTC has filed several lawsuits and amicus briefs against states in defense of this right.

Currently, the CFTC has filed lawsuits in the following states:

• Arizona
• Connecticut
• Illinois
• Minnesota
• New Mexico
• New York
• Rhode Island
• Wisconsin