Gaming Associations Call for Federal Ban on Sports Prediction Market Contracts
The American Gaming Association joined forces with the Indian Gaming Association, the Association of Gaming Equipment Manufacturers, the National Thoroughbred Racing Association, multiple state gaming regulatory agencies, and nearly two dozen labor unions to send a formal letter to U.S. Senators this month, and the coalition urges lawmakers to enact legislation that would stop prediction markets such as Kalshi from offering contracts tied to sports events across the country. The groups maintain that these contracts amount to sports betting under existing federal and state statutes, and they point out that the activity sidesteps oversight from state and tribal regulators while cutting into consumer safeguards and public tax collections.
Details Behind the Coalition Letter
Signatories to the letter represent a broad cross-section of the regulated gaming sector, and they emphasize that prediction platforms have begun listing event contracts on outcomes like game scores, player statistics, and season results. According to the document, these offerings mirror traditional sports wagers yet operate without the licensing, age verification, and revenue-sharing requirements that states and tribes impose on licensed operators. The letter references the bipartisan Prediction Markets Are Gambling Act, which lawmakers introduced in March 2026, and it calls on the Senate to advance that measure or similar language before additional platforms expand their product lines.
Criticism of CFTC Oversight
The coalition also directs sharp criticism at recent decisions by the Commodity Futures Trading Commission that permitted certain event contracts on sports, and signatories argue those approvals opened a regulatory gap that prediction markets now exploit. They note that federal law already classifies most sports betting as illegal when conducted outside state-approved channels, and the letter contends that CFTC allowances conflict with both the Wire Act and the Professional and Amateur Sports Protection Act framework that states adopted after 2018. Data from state regulators shows that licensed sportsbooks remitted more than $2 billion in taxes during the first half of 2026 alone, and the associations warn that untaxed prediction contracts divert those funds while leaving bettors without recourse through state problem-gambling programs.
State gaming commissions in New Jersey, Pennsylvania, and Michigan have echoed the same concerns in separate correspondence, and tribal regulators from several western states added their signatures because sports betting revenue supports essential government services on reservations. Labor unions representing casino workers joined the effort because employment at regulated properties depends on steady handle volume that flows through licensed channels rather than offshore or unregulated platforms.
Legislative Path Forward
The Prediction Markets Are Gambling Act remains in committee as of June 2026, and Senate staff members have indicated that hearings could occur before the August recess. Proponents of the bill have circulated draft language that would classify any contract whose value depends on the outcome of a sporting event as a form of gambling rather than a derivative, thereby removing CFTC jurisdiction and returning authority to states and tribes. Observers note that similar legislation stalled in prior sessions, yet the current coalition letter carries signatures from more than thirty organizations, a level of coordination that Senate aides say increases the measure's visibility.
Representatives from Kalshi have not issued a public response to the letter, though the platform continues to list a limited set of event contracts while it awaits further regulatory clarity. The CFTC has maintained that its earlier no-action positions applied only to narrow categories of contracts and did not constitute blanket approval for sports-related trading, yet the coalition letter disputes that distinction and asks Congress to settle the matter through statute.
Conclusion
The coordinated outreach from gaming associations, manufacturers, racing groups, regulators, and unions marks the most unified industry push yet against unregulated prediction contracts, and the letter places the issue squarely before the Senate at a moment when multiple states are still refining their own sports-betting statutes. Lawmakers now hold the question of whether federal legislation will close the perceived gap or whether the current patchwork of state rules and CFTC interpretations will continue to shape the market.