The multi-front war over the future of prediction markets in the United States is creating some diverse coalitions of opposition to the burgeoning vertical.
According to a Semafor report, 56 groups including gaming and tribal lobbies, as well as labor unions and chambers of commerce, co-signed a June 16 letter to U.S. senators asking for language within pending crypto legislation that “explicitly prohibits event contracts tied to sports and casino-style gaming.”
“The CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering. It lacks both the expertise and the infrastructure to police nationwide sports betting, particularly when robust state and tribal regulatory systems already exist,” the letter reads in part.
“Litigation may eventually clarify the law, but this is ultimately a question of congressional intent. Congress should not wait while this nationwide expansion of gambling continues. It should use crypto legislation to reaffirm a simple principle: sports betting falls outside the CFTC’s remit and cannot be offered through prediction market platforms.”
Who is opposing prediction markets in new letter?
Co-signers to the new letter encompass a broad and uncommon coalition of group with diverse legislative interests.
Among prominent names within the regulated U.S. gaming industry seeking assistance from the Senate are:
- American Gaming Association (AGA)
- Association of Gaming Equipment Manufacturers (AGEM)
- California Nations Indian Gaming Association (CNIGA)
- Indian Gaming Association (IGA)
- Nevada Resort Association (NRA)
- North American Gaming Regulators Association (NAGRA)
- The Hotel and Gaming Trades Council, AFL-CIO
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“While our organizations may differ on other issues, including gambling policy, we are united in our concern that prediction markets have fueled the largest expansion of gambling in U.S. history over the past 18 months—without voter approval or legislative authorization,” the letter reads.
“By offering nationwide sports betting through so-called ‘sports event contracts’ and branding it as a federally regulated financial product, these platforms have bypassed state and tribal law, weakened consumer protections, and undercut a system built on local control — one that supports jobs, generates tax revenue, and funds community priorities.”
What crypto legislation are prediction markets opponents targeting?
While not named specifically, the most prominent crypto-focused legislation before the Senate is the Digital Asset Market Clarity Act (HR 3633).
Experts regard the bill as the most comprehensive attempt at defining and regulating the crypto industry, thereby creating a friendlier regulatory climate for decentralized finance – a hallmark of the Trump administration to date.
The U.S. House of Representatives passed the Clarity Act in July 2025, 294-134, with 78 Democrats joining a unanimous cohort of 216 Republicans in voting for it. The Senate will need to clear the 60-vote threshold to bring the measure to a floor vote and hope for meeting a soft deadline of July 4 to approve the legislation.
Congress far from the only PM battlefield
While Congressional action draws the straightest line to resolving the ongoing prediction markets dispute in the U.S., it also ranks among the least likely answers because of the complexity of the Clarity Act and the upcoming midterm election.
The most likely answer, however, could come from the U.S. Supreme Court in the next 12 to 18 months, industry experts said at the recent SBC Summit Americas in Ft. Lauderdale, Fla. Ongoing legal battles spread across the country involve:
- State gaming regulators seeking to ban prediction markets from offering sports event contracts
- Federal regulators trying to assert their purported sole jurisdiction over such prediction market offerings
- Tribal gaming interests claiming prediction markets offer illegal sports betting in violation of the Indian Gaming Regulatory Act (IGRA)
The prevailing sentiment within the gaming industry appears to be that one of the state-level lawsuits winds its way up to the Supreme Court. Such an outcome would present similarly to how the high court settled the online sports betting question via its repeal of PASPA in 2018.
