US gaming groups ask Senate to ban sports prediction markets in CLARITY crypto bill

America’s main gaming associations have asked the Senate to block blockchain prediction markets on sports outcomes and gambling as part of the CLARITY crypto legislation. For high-risk operators and payment providers, the point is simple: if prediction markets are treated as a back door into sportsbook-style betting, the licensing and jurisdiction fight gets a lot uglier.

1. The letter was signed by AGA, IGA and AGEM. Their argument is that platforms such as Kalshi and Polymarket are effectively expanding gambling markets without state approval, which they say creates legal and social risk.
2. AGA, IGA and AGEM accuse prediction-market operators of disguising ordinary bets as financial products without the right licence. In their view, that lets them bypass state restrictions, avoid taxes and ignore consumer protection rules.
3. The groups also say the US Commodity Futures Trading Commission (CFTC) does not have enough resources for effective supervision. Their ask to Congress is direct: sports betting does not belong in the CFTC’s remit and should not be offered through prediction markets.
4. Kalshi and Polymarket remain the biggest players in the prediction-market space. Trading volume on Kalshi has reached $16.8 billion, while Polymarket has reached $7 billion. Bets on World Cup match outcomes have exceeded $3 billion.
5. On top of that, the CFTC recently proposed banning prediction-market bets linked to war, terrorism and death. In practice, that would leave sports as the main category the agency is willing to allow, while keeping the contracts under its own regulatory umbrella.