- AGA and other groups urge the Senate to ban sports prediction markets in the CLARITY Act.
- Coalition says prediction markets drove the largest US gambling expansion without voter approval.
- Platforms let users aged 18 bet in states that have not legalized sports betting.
More than 50 organizations spanning the gaming industry, tribal nations, labor unions, and state associations sent a letter to the US Senate on June 16, urging lawmakers to include explicit language in the CLARITY Act that would prohibit prediction markets from offering contracts tied to sports and casino-style gambling.
Signatories include the American Gaming Association (AGA), the Indian Gaming Association, the National Congress of American Indians, the Association of Gaming Equipment Manufacturers, and multiple UNITE HERE labor locals representing casino and hospitality workers across the country.
The Argument
The letter describes prediction markets as having fuelled the largest expansion of gambling in US history over the past 18 months without voter approval or legislative authorization.
“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,” the letter states.
The coalition argues that prediction market platforms allow users as young as 18 to place sports bets in states that have not legalized sports betting, market gambling products as investments, and operate without meaningful responsible gaming safeguards.
The CFTC Jurisdiction Question
The letter directly challenges the CFTC’s authority over sports-related prediction markets, arguing the agency was created to oversee commodities and derivatives markets and lacks both the expertise and infrastructure to regulate nationwide sports betting when robust state and tribal regulatory systems already exist.
The CFTC under Chairman Michael Selig has taken the opposite position. The agency has sued multiple states, including Wisconsin, Illinois, Arizona, Connecticut, New York, and New Mexico, to assert jurisdiction over sports prediction markets. Last week, the CFTC proposed new rules supporting sports-related prediction markets while limiting contracts tied to terrorism, assassinations, and war.
The Legislative Stakes
The CLARITY Act passed the Senate Banking Committee 15 to 9 in May and now awaits a Senate floor vote. The gaming coalition is pushing Congress to resolve the sports betting jurisdictional question through legislation rather than waiting for courts to clarify it through ongoing litigation.
Related: US Senators Move to Ban Sports Betting on Prediction Markets Via New Bipartisan Bill
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