The US gaming industry, tribal groups and labor unions are pressing the Senate to restrict prediction markets through pending crypto legislation.
A letter sent Tuesday (June 16) urged senators to add language that would bar event contracts tied to sports and casino-style gaming, as reported by Semafor.
The effort targets platforms such as Kalshi, which have expanded sports-related markets while arguing that their products fall under federal commodities law.
The letter was signed by the American Gaming Association (AGA), the Indian Gaming Association and the National Congress of American Indians.
Labor signatories included UNITE HERE, the Hotel and Gaming Trades Council and Culinary Workers Union Local 226, which represents the majority of hospitality workers in and around Las Vegas.
The groups said prediction market platforms had created a nationwide sports-betting channel without state votes or legislative approval. They also said the products were being presented as financial instruments, despite functioning like gambling in practice.
Their central argument is jurisdictional. They emphasize that sports betting in the US is generally licensed and taxed at the state level. Tribal gaming also operates under compact arrangements and federal law.
The groups said prediction markets were bypassing both systems by placing sports contracts under the Commodity Futures Trading Commission (CFTC).
The letter also raised consumer-protection concerns. It said some platforms allow people aged 18 to trade sports event contracts, including in states that have not authorised sports betting. Most regulated sportsbooks require customers to be at least 21.
Federal prediction market reforms under consideration
The push comes as Congress continues work on crypto market structure legislation. Gaming groups see that bill as a possible vehicle for drawing a harder line around sports event contracts.
The CFTC moved separately last week to seek comment on proposed rules for event contracts involving listed activities, particularly sports markets. The proposal covers how the agency would assess whether certain contracts are contrary to the public interest.
That process has not quieted state-level opposition. In May, a bipartisan group of 41 attorneys general urged the CFTC to recognise state authority over sports-related event contracts. They argued that such markets had effectively become unregulated sportsbooks.
New York and Illinois, as well as other states, have also acted through executive orders. New York Governor Kathy Hochul barred state employees from using confidential information in prediction markets.
Illinois Governor JB Pritzker issued a similar order covering state employees and event contracts. California, Maryland, North Carolina and Wisconsin have also enacted the same restrictions.
Those measures focused on insider-trading risks. Other objections have centred on tax revenue, gambling safeguards and the role of state regulators.
The clash is now moving on several tracks at once. Courts are weighing state enforcement powers, the CFTC is considering a new framework, and Congress is being asked to settle part of the dispute before prediction markets become further embedded in sports wagering.