The US Gambling Industry Calls for Legislation to Ban "Sports Prediction Market" from Entering Crypto Bill

NEW YORK, June 17 (The Block) — Several U.S. gambling industry associations are urging Congress to insert explicit provisions in the upcoming crypto market infrastructure bill that would ban crypto platforms from offering "prediction markets" tied to sporting events and casino-style betting as financial products. In a letter to the Senate, groups including the American Gaming Association, Indian Gaming Association, and Association of Gaming Equipment Manufacturers argued such platforms deliver nationwide gambling services via products like "sports event contracts," effectively bypassing state gambling regulators and local licensing requirements. These offerings, marketed under the guise of "financial derivatives," weaken consumer protections, pose risks to young users, and upend the traditional gambling ecosystem—an industry reliant on local tax revenue and job creation. The controversy unfolds against the backdrop of ongoing U.S. crypto regulatory efforts: the Senate Banking Committee has already advanced a version of the "Clarity Act," which will next move to a full Senate vote. The debate over whether prediction markets fall under the Commodity Futures Trading Commission (CFTC)’s regulatory purview is also intensifying. Meanwhile, regulatory tensions between federal agencies and crypto platforms are escalating. Some states have taken enforcement actions against platforms like Kalshi and Polymarket, while the U.S. Commodity Futures Trading Commission (CFTC) recently pushed for rule adjustments designed to allow certain sports-related prediction markets to operate, while restricting high-risk categories.