Gaming Industry Coalition Urges Senate to Block Sports Prediction Markets in Crypto Bill

A wide coalition of gambling industry groups is asking the US Senate to outlaw sports-related prediction markets before lawmakers finish writing the country's first major cryptocurrency rulebook. 

According to a report from Semafor, the American Gaming Association (AGA), the Indian Gaming Association, the Association of Gaming Equipment Manufacturers, the AFL-CIO's Hotel and Gaming Trades Council, and workers' union UNITE HERE signed a letter sent to the Senate this week. 

The letter asks lawmakers to add language to their crypto bill to prevent prediction market apps from listing contracts tied to sporting events or real-money online casino-style games such as slots, blackjack, and poker. 

The bill at the center of the request is the Clarity Act, the Senate's main vehicle for setting rules around digital assets. The Senate Banking Committee advanced its version of the legislation last month, and the measure now awaits a vote from the full chamber. 

The groups argue that prediction markets have driven the biggest jump in gambling activity the country has seen in years, all without a single voter or state legislature signing off on it. They want Congress to use the crypto bill to make clear that sports wagering falls under state and tribal authority rather than the Commodity Futures Trading Commission (CFTC). 

“Litigation may eventually clarify the law, but this is ultimately a question of congressional intent. Congress should not wait while this nationwide expansion of gambling continues. It should use crypto legislation to reaffirm a simple principle: sports betting falls outside the CFTC’s remit and cannot be offered through prediction market platforms,” the letter read.  

This isn't the first attempt to rein in the sector. Back in March, Sen. John Curtis and Adam Schiff introduced a standalone bill, the Prediction Markets Are Gambling Act, to block CFTC-regulated platforms from offering similar contracts.  

The CFTC has continued allowing the products to trade in the meantime. 

AGA says states are losing $1 billion to prediction markets 

The Senate letter is only the latest move in a much bigger campaign the gaming industry has been running this year. Back in late May, the AGA sent out an email warning that states and tribes are missing out on roughly $1 billion in gaming tax revenue due to the rise in sports-related prediction contracts. 

AGA President and CEO Bill Miller raised the figure during an appearance on CNBC, citing 41 state attorneys general, representing both political parties, who have said the CFTC has no business serving as the regulator for national sportsbooks. Miller framed the issue as one affecting state and tribal governments that rely on gambling tax dollars to fund community programs. 

“It’s about states and tribes that are losing literally a billion dollars today in state and tribal revenue that would otherwise go to fund important community projects,” he said.