US gaming industry urges Senate to ban sports prediction markets

More than 60 US gambling associations, tribal groups and unions have urged the Senate to shut sports prediction markets out of the country’s pending crypto legislation.

The letter, dated June 16, targets the CLARITY Act — a crypto market-structure bill that has already cleared the Senate Banking Committee. Signatories — including the American Gaming Association (AGA), the Indian Gaming Association (IGA) and the Association of Gaming Equipment Manufacturers (AGEM) — are asking Congress to explicitly bar prediction markets from accepting bets on sporting events. The industry contends that Kalshi and Polymarket are exploiting their status as financial platforms to offer sports wagers without state or tribal licences.

The $24B prediction market — how licensed US betting came under threat

Prediction markets grew from a niche format into a massive-volume market in less than two years. In May 2026 alone, Kalshi posted $16.8B in trading volume and Polymarket added $7B. Blask data shows the same market is highly concentrated by brand demand: Polymarket holds 73.16% of BAP among prediction-market platforms, while Kalshi follows with 23.18%. Together, the two brands account for more than 96% of tracked demand in the segment.

Sports contracts now drive much of the prediction-market boom. After Kalshi won its court fight with the CFTC over election contracts, platforms began extending the same model into sports and entertainment.

For licensed sportsbooks, this created a direct competitive threat. They pay state taxes, secure licences market by market and fund responsible-gambling programmes, while prediction markets operate under federal oversight and avoid many of those costs.

Blask data explains why the industry is pushing back now. Kalshi’s demand is up 148.9% YoY, while Polymarket remains the leading prediction-market brand despite a weaker May. Gambling associations, tribal groups and casino workers’ unions now see the sector as a threat to the regulatory framework behind legal US betting.

Congress’s decision will reshape the market

The fate of sports prediction markets now hinges on the CLARITY Act. If Congress bans sports event contracts, Kalshi and Polymarket will lose their main US growth engine — if the ban fails, the dispute moves to the courts and state level. 

For the industry, the central question is whether the US federal derivatives regulator — whose mandate covers commodities and financial markets, not sports wagering — can effectively police sports betting. The coalition of 60+ organisations makes one thing clear: the licensed market sees prediction markets as a systemic threat.