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Major U.S. gambling industry groups have called on Congress to prohibit prediction market platforms from offering sports-related event contracts, arguing that the products amount to unregulated sports betting and threaten the country’s regulated gaming framework.
In a letter sent to the Senate, the American Gaming Association, the Indian Gaming Association, the Association of Gaming Equipment Manufacturers and other industry representatives urged lawmakers to amend the Digital Market Clarity Act to explicitly ban prediction markets tied to sports betting and casino-style wagering.
The groups argued that prediction market operators are circumventing state and tribal gambling laws by offering sports-event contracts as federally regulated financial products.
“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 said.
The letter also raised concerns that sports-event contracts are marketed as investment products, potentially exposing younger users to gambling-related risks while lacking sufficient responsible gambling safeguards.
The groups further challenged the role of the Commodity Futures Trading Commission (CFTC) in overseeing such products, arguing that the regulator was not intended to supervise gambling activities and “lacks both expertise and infrastructure” to regulate them effectively.
The request comes as federal regulators continue to examine the legal status of sports-event contracts, which have become a growing point of contention between the gambling industry and prediction market operators.
The CFTC has proposed rules that would generally permit sports-related prediction markets while imposing restrictions on contracts considered vulnerable to manipulation or contrary to the public interest.
The debate reflects broader disagreements over whether prediction market contracts should be treated as financial instruments subject to federal oversight or as forms of sports wagering regulated under state and tribal gaming laws.