AGA to US Senate panel: Prediction markets evade state rules
American Gaming Association (AGA) President and CEO Bill Miller has warned U.S. senators that sports event contracts offered through federally regulated prediction markets are undermining state gaming laws and threatening sports integrity.
Speaking before the Senate Commerce Subcommittee on Consumer Protection, Technology, and Data Privacy, Miller said prediction market operators were functioning as “backdoor sports betting operations” while avoiding the regulatory standards imposed on licensed sportsbooks.
“We know it, they know it, and the American people know it,” Miller told lawmakers. “The prediction markets are running national sports books, and it’s time to hold them accountable in the same way we are.”
Miller appeared alongside witnesses, including former congressman Patrick McHenry, who now advises the Coalition for Prediction Markets, during a hearing examining the risks posed by sports event contracts offered through platforms regulated by the Commodity Futures Trading Commission (CFTC).
The hearing followed growing scrutiny in Washington over prediction market operators such as Kalshi and Polymarket, including concerns around insider trading, youth exposure and sports betting regulation.
According to a report by NBC News published before the hearing, watchdog group FairPredicts launched a six-figure advertising campaign in Washington targeting the prediction market sector and criticising Kalshi’s expansion into sports event contracts.
AGA chief cites tax losses and consumer protection gaps
Miller told senators the legal gaming industry operates under one of the strictest regulatory systems in the U.S., with more than 8,400 state and tribal regulators overseeing compliance, integrity monitoring, anti-money laundering (AML) controls and responsible gaming standards.
“The legal gaming industry, our regulators, and sports leagues are aligned on our shared mission to protect sports integrity,” Miller said.
He argued that state-regulated operators had spent years building safeguards after the repeal of the Professional and Amateur Sports Protection Act in 2018, while prediction markets were bypassing those frameworks.
“Prediction markets, they don’t comply with most of these important regulatory protections, and they allow 18-year-old teenagers to bet on sports,” Miller said.
He also criticised the way prediction market platforms present their products to consumers.
“We market ourselves accurately. We’re part of the entertainment economy,” he said. “These so-called prediction markets are deceptively calling sports betting financial contracts and investing.”
Miller claimed prediction markets had already cost states and tribal authorities nearly $1 billion in lost tax revenue that would otherwise support public services.
“A bipartisan coalition of 41 state attorneys general agreed. So-called sports events contracts are actually sports betting, and the states must regulate them,” he added.
Senate scrutiny intensifies over prediction markets
According to a report by InGame, lawmakers on the panel questioned whether the CFTC had the expertise to oversee sports-related betting products. Senator John Hickenlooper challenged prediction market representatives during the hearing over reports that younger social media influencers had promoted platforms such as Kalshi.
Committee chair Marsha Blackburn said the hearing would examine how to “strengthen oversight, protect the credibility of competition and address the growing exposure of young people and children to betting platforms”.
Miller echoed those concerns in his testimony, warning that prediction markets were expanding beyond traditional financial products into areas that Congress never intended the CFTC to regulate.
“The CFTC was created to regulate markets critical to the functioning of the nation’s economy, not to regulate Monday Night Football,” Miller said. He also pointed to court filings by Kalshi in 2024, in which the company argued that Congress did not intend for sports betting to occur through derivative markets.
“And just a few months later, they were offering an overwhelming menu of sports bets from the NFL playoffs to the Super Bowl to March Madness,” Miller said.
Industry groups step up pressure on regulators
The hearing highlighted growing cooperation between the AGA and tribal gaming groups in opposing federally regulated sports event contracts. Miller said legal gaming operators, regulators and sports leagues were already working together to improve integrity protections and responsible gaming measures.
“Our process protects the integrity of sports,” he said. “Why the prediction markets don’t want to play by these rules, it’s for them to explain.”
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