Major American gambling associations are calling on the US Senate to outlaw sports and gambling-related prediction markets as part of a broader cryptocurrency regulation initiative. The American Gaming Association (AGA), the Interactive Gambling Association (IGA), and the Association of Gaming Equipment Manufacturers (AGEM) argue that these markets expand gambling activities illegally without the necessary voter or state approval.
In their appeal, the organizations assert that these platforms masquerade as financial products, enabling them to bypass local laws, tax obligations, and consumer protection measures. They also express concern that the US Commodity Futures Trading Commission (CFTC) does not have the capacity to effectively regulate such betting activities.
“Congress must affirm: sports betting is not within the CFTC's jurisdiction and cannot be offered through prediction markets,” the letter states.
This push for regulation coincides with the ongoing discussions regarding the CLARITY Act, which has already received approval from the Senate Banking Committee. The leading companies in the prediction markets sector include Kalshi and Polymarket, with Kalshi reporting a trading volume of $16.8 billion in May, while Polymarket reached $7 billion. Additionally, Indonesia's Ministry of Communication and Information Technology has blocked access to Polymarket, comparing it to an online casino.
