WASHINGTON – The American Gaming Association is urging Congress to bar sports‑related trading on prediction markets, arguing that federal regulators have exceeded their authority by allowing platforms such as Kalshi to offer sports event contracts nationwide.
In a letter sent to members of the U.S. Senate, the AGA said the Commodity Futures Trading Commission has improperly permitted prediction markets to function as de facto online sportsbooks, despite longstanding federal restrictions on gambling and state‑level regulatory frameworks.
“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,” the letter said.
The letter was co‑signed by the Indian Gaming Association, the Association of Gaming Equipment Manufacturers, the National Thoroughbred Racing Association, several state gaming regulators, and nearly two dozen labor unions.
Regulatory Clash
Prediction markets fall under the oversight of the CFTC, which regulates commodities and derivatives. Under the second Trump administration, the agency has allowed markets to list contracts tied to sports outcomes. Traders can buy and sell shares tied to events such as World Cup matches, with tens of millions of dollars in notional volume changing hands.
AGA officials argue that such activity is indistinguishable from sports wagering and violates the Commodity Exchange Act, which historically bars gambling‑style contracts.
“The CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering,” the AGA wrote. “It lacks both the expertise and the infrastructure to police nationwide sports betting, particularly when robust state and tribal regulatory systems already exist.”
The association said litigation may eventually clarify the issue but urged Congress to act sooner, warning that prediction markets are expanding into sports betting without the consumer protections required of licensed operators.
Federal Legislation Introduced
In March, Sens. John Curtis, R‑Utah, and Adam Schiff, D‑Calif., introduced the bipartisan Prediction Markets Are Gambling Act, which would prohibit the CFTC from authorizing trading on sports or casino‑style events.
“Sports prediction contracts are sports bets — just with a different name. And yet, these contracts are currently offered in all 50 states in clear violation of state and federal law,” Schiff said when announcing the bill.
“Rather than enforce the law, the CFTC is greenlighting these markets and even promoting their growth,” he added. “It’s time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue.”
The bill is currently before the Senate Agriculture, Nutrition, and Forestry Committee.
