- An outright ban of sports event contracts at Kalshi and other prediction markets will be pursued in a Tuesday congressional hearing.
- Written testimony from the Indian Gaming Association and American Gaming Association expressed their desire for an outright ban of “sports event contracts.”
- Testimonies from witnesses in favor of prediction markets insist the CFTC is already capable of regulating prediction markets.
WASHINGTON – Prediction markets offering sports event contracts could soon be over. During tomorrow’s Congressional hearing on sports prediction markets, the Indian Gaming Association (IGA) and American Gaming Association (AGA) will pursue an outright ban of these “sports event contracts”, according to their written testimonies obtained by gaming lawyer Daniel Wallach.
The U.S. House Committee on Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development will hold a hearing on Tuesday to discuss sports event contracts at prediction market apps. The hearing is titled “Examining Prediction Markets: Customer Protections and Market Integrity in Sports Event Prediction Markets” and will hear testimony from figures in support of prediction markets, and those against them.
Why This Matters
The AGA and IGA are the two largest lobbying organizations that American gambling has to offer. While they don’t always agree and have been on opposite sides of legal sports betting expansion between land-based and online operators, they’re now creating a historic alliance against prediction markets.
Both entities consider sports event contracts at prediction markets enough of a threat to mobilize jointly against them. The alliance also shows that the CFTC is clearly not interested in changing the way they regulate sports betting contracts, so now the AGA and IGA want Congress involved.
Outright ban intentions for Tuesday’s hearing is also an example of striking while the iron is still hot. The unprecedented amount of sports betting volume at Kalshi and other prediction operators is one thing, but numerous instances of insider trading using non-public information has surfaced in recent months.
The Senate passed a bill preventing U.S. Senators from trading on prediction markets on April 30 and now many states and even the military are pushing bills to ban insider trading with predictions. Recent bans can be seen in North Carolina and Arizona, so the IGA and AGA’s collective view that predictions allow sports betting illegally isn’t the only reason to call the CFTC’s regulation into question.
