Coalition Urges Senate to Rein in CFTC on Sports Prediction Contracts

The American Gaming Association joined forces with the Indian Gaming Association, the Association of Gaming Equipment Manufacturers, the National Thoroughbred Racing Association, multiple state regulatory bodies, and labor unions when they delivered a joint letter to U.S. Senators this spring. The correspondence called for swift passage of the Prediction Markets Are Gambling Act, a measure introduced in March 2026 by Senators John Curtis of Utah and Adam Schiff of California. Signatories maintain that the Commodity Futures Trading Commission stepped beyond its statutory limits by authorizing platforms such as Kalshi to list contracts tied to sports outcomes across the entire country.

Arguments Presented in the Letter

The groups contend that these event contracts function as sports betting products, yet they operate outside the licensing and consumer-protection frameworks that states and tribal governments have established over many years. Because the CFTC approved nationwide trading on these instruments, operators can accept wagers from jurisdictions where sports betting remains restricted or prohibited, according to the letter. The organizations point out that existing federal and state laws already classify most sports wagering as gambling subject to localized control, and they argue the commission's decisions effectively nullify those boundaries.

State regulatory agencies that signed the document emphasize their ongoing responsibility to oversee betting activity within their borders. They note that any expansion of event contracts without state approval disrupts revenue streams earmarked for education, public health programs, and tribal economic development. Labor unions added that unregulated interstate betting threatens jobs at licensed facilities that must comply with strict local standards.

Details of the Proposed Legislation

The Prediction Markets Are Gambling Act would amend the Commodity Exchange Act to bar the CFTC from permitting trading on contracts that reference sports competitions or casino-style games. Sponsors designed the language to restore what they describe as the original division of regulatory authority between federal derivatives oversight and state gambling control. The bill does not seek to ban prediction markets outright; instead, it narrows the commission's scope so that sports-related and gambling-like instruments fall under the same rules that govern other forms of betting.

Observers tracking the legislation report that the measure gained bipartisan backing shortly after its March 2026 filing. Curtis, a Republican, and Schiff, a Democrat, framed the proposal as a clarification rather than an expansion of federal power. Committee staff have scheduled preliminary discussions for later this summer, though no floor vote timeline has been announced as of early June 2026.

Industry Context and Regulatory History

Prediction market platforms began seeking CFTC registration years ago for contracts on economic indicators, weather data, and political events. In recent decisions the commission extended that approval to include certain sports propositions, prompting the current coalition response. Trade associations note that licensed sportsbooks in more than two dozen states already operate under agreements that share revenue wth host governments and enforce age and location verification. They maintain that allowing unregistered platforms to offer overlapping products creates an uneven playing field.

Representatives from equipment manufacturers highlighted technical and compliance differences between regulated gaming systems and the software used by prediction market operators. They cited examples where state regulators require detailed reporting on bet types, payout percentages, and responsible-gaming measures, requirements not currently applied to CFTC-approved contracts. The letter argues these gaps leave consumers without uniform protections across platforms.

Next Steps and Stakeholder Positions

Senators receiving the letter have not issued formal replies, yet staff members from both parties have acknowledged receipt and indicated the document will be entered into the legislative record. Gaming regulators in several states have begun drafting model legislation that mirrors the federal proposal, preparing contingency measures in case Congress acts. Meanwhile, tribal governments continue to stress that any change in federal treatment of event contracts must preserve compact authority under the Indian Gaming Regulatory Act.

Analysts following the issue expect additional hearings before the Senate Agriculture Committee, which oversees CFTC matters, and the Senate Judiciary Committee, which handles gambling policy. Both panels received copies of the coalition letter, and staff have requested data on the volume of sports-related contracts currently trading on approved platforms.

Conclusion

The joint letter marks a coordinated effort by established gaming stakeholders to influence federal policy on an emerging category of financial products. With the Prediction Markets Are Gambling Act awaiting further Senate action, the debate centers on where regulatory lines should be drawn between derivatives trading and sports wagering. Stakeholders on all sides continue to monitor developments as the June 2026 legislative calendar advances.