Two major players in the US betting world are stepping up their efforts to convince lawmakers to act. They warn that sports-themed prediction markets without proper oversight now look a lot like full-blown betting operations.
Call Intensifies for Congress to Rein in Prediction Market Sports Contracts
This week, the American Gaming Association (AGA) and the Indian Gaming Association (IGA) called on Congress to use ongoing crypto law discussions as a chance to stop these contracts. They argue that these deals copy sports betting but do not follow any of the rules that licensed operators must obey.
Several organizations sent a joint letter to federal lawmakers on January 12. They explained how event-based trading platforms have grown since introducing similar products last year. The letter stated that these platforms moved beyond simple game outcome predictions. They started offering complex bundles of outcomes and markets tied to player movements, including college transfer decisions. Industry officials claimed this quick change happened because the Commodity Futures Trading Commission let the platforms approve their own products without formal review.
The two groups emphasized the stark difference between regulated gambling and these markets. Licensed casinos and sportsbooks must enforce strict age limits, do background checks, maintain anti-money-laundering measures, and support responsible gaming initiatives. In contrast, prediction markets let users as young as 18 take part across the country, leaving state governments and tribal authorities out of the regulation and revenue loop. The letter pointed out that attorneys general in many states have already cautioned that these contracts break their laws and clash with tribal rights set by federal laws.
Leaders Urge Lawmakers to Block High-Risk Political Betting
The worries go way beyond just sports. The groups pointed out recent trading linked to global political unrest, including a market about the arrest of Venezuela’s Nicolás Maduro and others connected to armed fights overseas. They said these types of bets invite cheating, depend on information that cannot be checked, and let people with insider knowledge make money. They believe no state or tribal regulator would ever approve bets on such events, and allowing them through financial markets hurts public trust.
Gaming big shots also pointed out what is at stake money-wise. They stressed that legal gambling puts hundreds of billions of dollars into the country’s economy and creates millions of jobs. They claim this cash, and these jobs are at risk when unauthorized platforms lure away customers. They brought up that prediction markets do not offer any of the safeguards for users or openness rules that states demand.
The gaming world is making its case as lawmakers look into a bigger picture for digital assets. CFTC Chair Michael Selig says the agency will hold off on figuring out its power over these deals until courts weigh in. However, he also mentions they will follow Congress’s lead if they spell things out. Gaming groups are pushing hard for lawmakers to clear things up right now. They want them to put their foot down and say no to sports betting through CFTC-approved platforms.