Gaming Industry Lobbying Congress to Stifle Prediction Markets

The American Gaming Association, the Indian Gaming Association, and the Association of Gaming Equipment Manufacturers sent a joint letter to the Senate, urging lawmakers to incorporate restrictive language into the pending CLARITY Act. These groups contend that prediction platforms—which treat sports outcomes as financial derivatives—have sparked the largest unauthorized expansion of gambling in American history. By framing wagers as financial contracts, operators avoid the tax obligations and consumer protection standards mandated for state-licensed casinos and betting houses.

Legal tensions are mounting as the Commodity Futures Trading Commission (CFTC) asserts its jurisdiction over event contracts, recently clashing with state regulators in New Mexico. While the CFTC maintains that its mandate includes oversight of these instruments, gaming lobbyists argue the agency lacks the infrastructure to manage nationwide wagering. With bills like the Prediction Markets Are Gambling Act gaining traction, the industry is pushing to force these platforms into the existing state-regulated framework, potentially dismantling the federal regulatory path that companies like Kalshi and Polymarket have relied upon to operate.