Concerns over prediction markets are mounting among gaming associations and tribal leaders who are calling on federal lawmakers to impose strict regulations. The American Gaming Association and the Inter-Tribal Council of the Five Civilized Tribes have urged Congress and the Commodity Futures Trading Commission to curb platforms that offer sports betting contracts nationwide. Industry leaders argue these platforms operate outside established state and tribal legal frameworks, threatening tribal sovereignty and draining state tax revenues across the country.
Testifying before a Senate Agriculture subcommittee, Christopher Cylke of the American Gaming Association stated that platforms such as Kalshi and Polymarket use federal event-contract rules to bypass local gaming systems. He noted that sports contracts offered by prediction markets are functionally identical to traditional sports wagers, despite being classified as financial instruments. Trading volumes on these platforms have surged rapidly in recent months. Kalshi alone recorded $23.7 billion in trading volume last year and $111 billion during the first six months of this year. More than 80% of that activity involved sports events, including $2.5 billion tied to the World Cup over the past month.
Industry advocates estimate that states and tribes have lost more than $1.2 billion in gaming tax revenue due to unregulated market offerings. Serious concerns have also been raised regarding consumer protections and age restrictions. While traditional sportsbooks require customers to be at least 21 years old, some platforms allow individuals as young as 18 to participate, with about 4% of overall trading volume coming from underage users. Additionally, prediction markets accounted for 45% of digital sports betting advertisements seen by consumers during the first five and a half months of the year, while operating without state responsible gaming oversight. Survey data showed 78% of sports contract users incorrectly believed state gaming regulators could resolve platform disputes.
Tribal leaders strongly share these concerns, emphasizing the direct threat to existing tribal-state compacts. Choctaw Chief Gary Batton warned that these platforms exploit legal loopholes and undermine long-standing tribal gaming laws that have governed the industry for decades. The Inter-Tribal Council passed a formal resolution requesting that federal authorities require full compliance with existing tribal, federal, and state laws. Furthermore, a bipartisan group of 41 state attorneys general has warned federal regulators that these offerings bypass critical state oversight and consumer protections. Both tribal leaders and gaming industry officials agree that congressional intervention is necessary to preserve regulatory integrity and protect sovereign rights.
