Gaming Groups Seek Ban on Prediction Markets Betting
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- Gaming groups sent a letter to Congress urging lawmakers to ban prediction markets sports betting through the CLARITY Act, arguing the CFTC "lacks both the expertise and the infrastructure to police nationwide sports betting."
- CFTC Chair Michael Selig has claimed "exclusive jurisdiction" over prediction markets and has backed Kalshi and Polymarket against lawsuits brought by state gaming authorities.
- The American Gaming Association reported that state gaming authorities have lost approximately $1.08 billion in tax dollars since prediction markets began offering sports event contracts.
- The CLARITY Act passed the House in July 2025 and some lawmakers expect it to clear Congress by August, though it has faced delays over stablecoin yield, ethics, and tokenized equities concerns.
- Kalshi, Polymarket, and the CFTC argue prediction market event contracts are "swaps" subject only to federal jurisdiction, while gaming groups contend robust state and tribal regulatory systems already cover sports wagering.
- Some industry advocates anticipate the federal-state regulatory dispute could eventually reach the Supreme Court, which in its 2018 Murphy v. NCAA decision gave states authority over sports gambling.
Why it matters: Gaming groups have reframed the CLARITY Act from a crypto-turf bill into a $1.08 billion tax-revenue fight, pressing Congress to strip CFTC jurisdiction over sports-event contracts before the bill moves — setting up a direct clash with Selig's agency and the prediction-market platforms it backs.
