Two of the most influential voices in US gaming have issued a fresh warning to Congress as lawmakers weigh a significant shift in financial regulation. In a joint letter sent Friday, American Gaming Association (AGA) president and CEO William C. Miller Jr. and Indian Gaming Association (IGA) chairman David Z. Bean urged lawmakers to draw a firm line between federally regulated financial products and what they see as unregulated gambling.
Prediction Platforms May Circumvent State Regulations
The letter from the two organizations is a response to the Digital Asset Clarity Act. This bill would expand the Commodity Futures Trading Commission (CFTC)’s authority over digital assets. The Senate Banking Committee has already moved the legislation forward, leaving the door open for broader debate about what, exactly, falls under the agency’s watch. For Miller and Bean, that discussion now carries stakes beyond cryptocurrency.
The rapid rise of prediction markets offering contracts tied to sports outcomes is a major point of contention. The two representatives argue that these platforms, traditionally focused on financial or political events, now resemble sportsbooks in all but name. Users can take positions on game results, player statistics, and multi-outcome scenarios that closely resemble parlays.
Platforms continue to expand, even as state attorneys general, regulators, tribes, and other stakeholders have raised objections that the contracts violate state law and undermine tribal sovereignty.
AGA and IGA letter
Since the Supreme Court cleared the path for state-level sports betting in 2018, patchwork legislation has emerged across most of the country. Today, most states allow some form of legal wagering, each with its own licensing standards, tax structures, and consumer protections. Industry representatives now argue that prediction platforms sidestep this system.
Legal Ambiguities Continue to Increase
In their letter, Miller and Bean urged Congress to add language that would stop prediction market operators from offering sports-related contracts nationwide under federal oversight. They argue that without such clarity, companies could bypass state and tribal rules by presenting wagers as financial instruments.
These concerns are grounded in reality. Kalshi, a leading prediction platform, began listing contracts on sports events earlier this year, and other companies have followed its example. Some established betting companies have also been exploring similar offerings, hoping to avoid state taxes tied to traditional sportsbooks. Presenting their offerings as financial instruments would also allow them to enter states that have not yet legalized online wagering.
The harms presented by unchecked prediction markets are real and escalating, and momentum for congressional action is growing.
AGA and IGA letter
State regulators and tribes have pushed back, filing lawsuits and issuing cease-and-desist orders. However, conflicting rulings have only exacerbated the legal gray area. Meanwhile, the AGA and IGA allege that the CFTC offers no meaningful regulation, allowing prediction platforms to expand unopposed. As the federal authority has consistently sided with these markets in their disputes with state regulators, the accusations may hold some merit.