Gaming lobby joins tribes, unions to restrict prediction markets
The debate over prediction markets in the United States is intensifying as a coalition of 56 organisations has urged Congress to prohibit sports-related event contracts through pending cryptocurrency legislation. The groups, which include gaming operators, tribal organisations, labour unions, and industry stakeholders, argue that platforms offering sports event contracts are functioning similarly to sportsbooks while operating outside traditional state gaming regulations, as reported by Semafor.
Prediction market operators argue that their products are regulated by the Commodity Futures Trading Commission (CFTC) and should be considered financial contracts rather than gambling products. The disagreement has sparked a broader discussion about regulatory power, with detractors arguing that sports betting should continue to be governed by state and tribal gaming laws. As lawmakers contemplate new crypto and financial legislation, the outcome could have far-reaching repercussions for the regulation of prediction markets in the United States.
Letter to US senators
On 16 June 2026, a coalition of opponents to prediction markets sent a letter to US senators, marking a sharp escalation in the debate. It requested that legislators include a provision in the cryptocurrency bill that prohibits sports-related contracts. They said that prediction markets had permitted gambling to reach such high levels in the United States in the last 18 months, despite the fact that no legislation or vote had been passed.
The letter stated, “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.”
By tying their request to crypto legislation, opponents sought a clear congressional statement to prevent future disputes and exclude sports betting from federally regulated prediction markets.
The coalition’s key arguments centre on keeping sports betting outside CFTC oversight, stressing that state systems provide stronger consumer protections; warning that prediction markets undermine tribal gaming frameworks; highlighting the risk of declining state and tribal revenues; and urging Congress to clarify the limits of event contracts.
Why operators are concerned
Commercial gaming operators see prediction markets as a direct challenge to their business. Since the Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA) in 2018, sports betting has become one of the fastest-growing parts of the gambling industry, and casinos have invested heavily in licensing, compliance systems, and technology to secure legal access to state markets.
Prediction market platforms offer sports-related contracts with federal oversight, circumventing state licensing restrictions. Industry leaders argue that this is an attempt by prediction market operators to sidestep the structure established by industry players. Their concern extends beyond competition: they believe that permitting prediction markets to operate in this manner will set a precedent for increasing gambling without legislative clearance.
Among prominent names within the regulated US gaming industry seeking assistance from the Senate are:
- American Gaming Association (AGA)
- Association of Gaming Equipment Manufacturers (AGEM)
- California Nations Indian Gaming Association (CNIGA)
- Indian Gaming Association (IGA)
- Nevada Resort Association (NRA)
- North American Gaming Regulators Association (NAGRA)
- The Hotel and Gaming Trades Council, AFL-CIO
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Concerns about consumer protection
The question of consumer protection is becoming more prominent in the debate over prediction markets. State gaming commissions have tight standards in place about responsible gambling, age limitations, and help for individuals who are addicted. It has been argued that prediction markets are governed by a different set of regulations, and hence regulators may be unable to control gambling dangers.
The letter further added, “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.”
Crypto legislation at centre of debate
The Digital Asset Market Clarity Act (HR 3633) appears at the centre of efforts to regulate cryptocurrency and may legalise prediction markets and decentralised finance (DeFi) without sufficient regulation. In July 2025, it passed the House by an overwhelming majority of 294-134, with 78 Democrats voting in favour.
However, critics of the measure are concerned that it may legitimise prediction markets and other cryptocurrency applications before adequate consumer safeguards and market supervision mechanisms are in place. The Senate is now at a critical juncture: it needs 60 votes to move the legislation to a floor debate, a figure that remains unknown as the soft deadline of 4 July approaches.
Comparisons to PASPA ruling
As demonstrated by the PASPA ruling in 2018, a single Supreme Court decision can dramatically transform an entire industry by shifting power from federal to state regulation, moving jurisdiction to regulate sports betting from the federal level to the states. Prediction markets are now reaching a similar tipping point. A Supreme Court judgment might determine whether federal regulators have authority, whether sports contracts are considered gambling under state law, or whether Congress acts first. Another possibility is a hybrid approach developed through future legislation.
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