The American gaming industry is intensifying lobbying efforts in Washington to impose strict limits on sports prediction markets, arguing they operate in a regulatory gray zone that undercuts licensed sports betting operators. Major players including the American Gaming Association, DraftKings, FanDuel, and casino groups have urged Congress to pass targeted legislation that would restrict retail access to decentralized prediction platforms for U.S. sports events.
In letters sent to key lawmakers this week, the industry highlighted concerns over consumer protection, market integrity, and unfair competition. Unlike regulated sportsbooks that pay taxes, hold licenses, and implement responsible gambling measures, prediction markets such as Polymarket often allow anonymous trading on event outcomes with lower fees and different payout structures. Critics say this creates an uneven playing field and could expose users to higher risks of manipulation or illicit activity.
Supporters of prediction markets counter that they provide valuable price discovery and are distinct from traditional sports betting. However, gaming executives warn that the rapid growth of these platforms, especially around major events like the NFL season and March Madness, is siphoning revenue from state-licensed operators and reducing tax collections for state governments.
Lawmakers on both sides of the aisle have expressed interest in addressing the issue as part of broader digital asset regulation. The stalled CLARITY Act could potentially include provisions on event contracts, but gaming groups are pushing for standalone measures to protect the regulated sports betting sector, which generated over $10 billion in revenue last year.
As debates continue, the industry is calling for clear federal guidelines that would either bring prediction markets under strict oversight or limit their offerings on U.S. sports. The outcome could significantly shape the future intersection of cryptocurrency, prediction markets, and traditional gaming in the United States.