Calls Grow in the US to Ban Sports Prediction Markets Through Crypto Legislation
The American gambling industry has stepped up pressure on Congress over sports prediction markets. A coalition of industry organizations has sent a letter to the US Senate calling for an outright ban on such products to be included in an upcoming bill regulating the crypto market.
The letter was signed by the American Gaming Association, Native American tribal gaming associations, industry groups, regulators, and labour unions. The authors argue that over the past year and a half, prediction markets have become the largest expansion of gambling in US history, without voter approval and without decisions by state legislatures.
The main objection is straightforward: under the guise of contracts, users are being offered something that, in substance, looks like sports betting. At the same time, platforms can operate in jurisdictions where regular sports betting is not permitted and accept users aged 18 and up, even in places where stricter age limits apply to betting.
The coalition also points to weak responsible gambling measures. According to the letter’s authors, prediction markets do not provide the level of protection used in regulated betting, from self-exclusion tools to monitoring for problem gambling behaviour. The positioning of these products as investments is another point of frustration. For the industry, this is a dangerous substitution: a player may see a risky wager not as gambling activity, but as a financial strategy.
Now the gambling business wants Congress to draw the line directly in cryptocurrency legislation. The letter proposes stating that sports betting does not fall within the authority of the Commodity Futures Trading Commission (CFTC) and cannot be offered through prediction market platforms.
For Kalshi and similar services, this could become one of the most serious blows yet. The dispute over prediction markets has long moved beyond terminology: the betting industry sees them as competitors playing by different rules, while the platforms themselves are trying to establish their status as financial products. The issue is now moving closer to a political decision — and the crypto bill could become a convenient place to either leave that door open or slam it shut.
Olivia Grant is an iGaming news reporter at CasinosInCanada who covers casino industry updates, regulations, and market developments.
I can understand why regulators are paying closer attention to prediction markets, especially now that they're starting to overlap with traditional sports betting. The real challenge is finding a balance between protecting consumers and allowing innovation, because an outright ban could just push users toward less regulated alternatives.