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

BlockBeats News, June 17th - According to The Block, several US gambling industry associations are urging Congress to include explicit provisions in the upcoming crypto market infrastructure bill to ban "prediction markets" related to sporting events and casino-style betting from being offered in a financial product form on crypto platforms.

Industry organizations including the American Gaming Association, Indian Gaming Association, and Association of Gaming Equipment Manufacturers pointed out in a letter to the Senate that such platforms provide nationwide gambling services through forms such as "sports event contracts," effectively bypassing state gambling regulatory systems and local licensing requirements.

These products, packaged under the guise of "financial derivatives," may weaken consumer protection mechanisms, pose risks to young users, and disrupt the traditional gambling industry structure that relies on local tax revenue and employment. This controversy comes amid the backdrop of US crypto market legislation. 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 CFTC regulatory purview" continues to escalate.

Meanwhile, the regulatory tug-of-war between agencies and platforms is intensifying. Some states have taken enforcement actions against platforms like Kalshi and Polymarket, while the US Commodity Futures Trading Commission (CFTC) has recently pushed for rule adjustments in an attempt to support the development of some sports-related prediction markets while limiting risk categories.