Sports Predictions Unite Gaming Interests In Appeal To Congress

Summary

An unlikely alliance of the American Gaming Association (AGA) and the Indian Gaming Association (IGA) has asked Congress to step in against sports event contracts offered through prediction markets. The groups say these contracts operate under federal commodities law — effectively bypassing state and tribal gaming rules, consumer protections, licensing, taxes and integrity safeguards. Major operators and prediction platforms such as Kalshi, DraftKings and FanDuel figure centrally in the dispute, and the trade groups argue congressional action via forthcoming crypto market structure legislation is the clearest way to resolve the jurisdictional mess.

Key Points

AGA and IGA jointly urged Congress to treat sports event contracts offered by prediction markets as outside federal commodities law when they function like sports wagers.
Prediction markets (eg. Kalshi) have seen rapid sports volume — Kalshi reported roughly $23bn in trading volume since September, with ~90% from sports and individual markets hitting tens of millions.
DraftKings and FanDuel recently launched sports event contracts, prompting both to leave the AGA and raising concerns about operators offering products without sportsbook safeguards.
Trade groups say the Commodity Futures Trading Commission’s limited enforcement and self-certification process has allowed prediction markets to expand into areas prohibited by state laws and tribal compacts.
States and tribes argue prediction markets avoid licensing fees, taxes and protections that fund enforcement and responsible gaming; a number of lawsuits in states (Nevada, Tennessee, New Jersey, Maryland) reflect that tension.
Longstanding tribal-commercial tensions over market control have in this case produced temporary cooperation to defend compact rights and regulatory clarity at the federal level.

Content Summary

The AGA and IGA sent a joint letter to Congress urging lawmakers to clarify that sports event contracts used as wagers should not be treated as commodity contracts under federal law. They argue prediction markets are exploiting gaps in CFTC oversight to operate outside state and tribal gambling regimes and the consumer protections those regimes provide. Kalshi and similar platforms have rapidly expanded sports markets; Kalshi’s sports trading dominates its volume and has included high-dollar single-event markets. DraftKings and FanDuel have moved into event contracts too, prompting concerns about inconsistent responsible‑gaming safeguards and the avoidance of taxes and licensing.

The groups want Congress to use pending cryptocurrency market-structure legislation as the vehicle to determine where sports event contracts belong legally. The AGA and IGA assert that without legislative clarity, courts and regulators will reshape sports betting by default — potentially undermining state laws and tribal compacts. The article also notes prior instances where tribes and commercial operators have fought over market control, and how those divisions have sometimes turned into cooperation when faced with common, unregulated threats.

Context and Relevance

This is a policy crossroads for the US gaming industry. If Congress acts, it could close a loophole that lets prediction markets offer bets that evade state and tribal oversight — changing the business model for several fast-growing platforms and altering revenue and regulatory responsibilities for states and tribes. The debate touches federal regulatory scope (CFTC), state sovereignty, tribal compact rights, responsible gaming safeguards, and how major operators monetise new products. Lawmakers, regulators and operators are watching closely because the outcome will shape where — and how — sports wagers can legally be offered.

Author style

Punchy: this isn’t a niche squabble — it’s a potential turning point for who controls and profits from online sports wagering in the US. Read closely if you follow regulation, tribal gaming rights, or the commercial sportsbook market; the details will matter to operators, states and tribes alike.

Why should I read this?

Short version: tribes and casinos, usually at each other’s throats, have teamed up because prediction markets are muscling into a space that would normally be tightly regulated. If you care about who sets the rules (and who pays taxes), this is where the fight’s headed — and Congress could change everything. Quick skim or deep read — pick your level, but don’t ignore it.