Share 
The American Gaming Association (AGA) and the Indian Gaming Association (IGA) are urging Congress to block unregulated sports event contracts offered by prediction markets. In a joint letter sent Jan. 12, the groups asked lawmakers to include the ban in upcoming cryptocurrency legislation before the issue becomes harder to contain.
Platforms such as Kalshi and Polymarket allow users to trade contracts on outcomes ranging from NFL results to college transfer news, even in states where sports betting is illegal. Sign-up requirements are minimal, and consumer protections are thin. The associations argue that these contracts circumvent state gambling laws and undermine tribal gaming rights.
Gaming groups sounding alarm on sports event contracts
AGA President Bill Miller and IGA Chairman David Bean warned that prediction markets have expanded rapidly since early 2025. What began as simple outcome predictions has evolved into complex parlays and prop bets that closely resemble legal sports wagering.
The letter criticizes the Commodity Futures Trading Commission (CFTC) for allowing platforms to self-certify contracts without prior approval. According to the associations, this creates a backdoor for activities that violate laws such as the Wire Act, which prohibits interstate sports wagering, and conflicts with the Indian Gaming Regulatory Act, which grants tribes exclusive gaming rights on their territories.
Tennessee leads crackdown on unregulated contracts
State leaders have raised similar concerns. Last year, attorneys general from 39 states sent a letter asserting that sports event contracts offered by prediction markets violate local gambling statutes.
Tennessee led the effort by issuing cease-and-desist notices to Kalshi, Polymarket, and Crypto.com, requiring them to halt operations for residents, issue refunds, and close outstanding contracts by the end of January. Other states, including Connecticut, Illinois, and Ohio, followed suit. Tribes have filed lawsuits, claiming unregulated contracts infringe on gaming compacts and divert potential revenue.
The battle has moved to the courts. Cases in New Jersey, Nevada, and New York could set precedents forcing platforms to comply with state law or exit certain markets. A Maryland judge recently ruled that federal commodity regulations do not preempt state gambling prohibitions, though outcomes in other states may differ.
Regulated betting vs. sports event contracts
Legal sports betting in the US expanded after the Supreme Court struck down the federal ban in 2018. Since then, the industry has grown to 39 states plus Washington, D.C., generating tax revenue, supporting jobs, and funding public services. Licensed operators must meet strict standards, including a minimum age of 21, mandatory licensing, anti-money laundering protocols, and responsible gaming programs.
Sports event contracts offered by unregulated prediction markets bypass these safeguards. They market trades as financial instruments, exposing users to risks such as match-fixing and insider trading. Some contracts have included wagers on international politics or political conflicts—outcomes no state would sanction. Sports leagues, including the NFL, have lobbied Congress, emphasizing the need for integrity measures. “We must shield fans from unchecked risks,” an NFL spokesperson said.
Prediction markets argue CFTC oversight protects users
Operators argue their contracts serve as forecasting tools and risk-hedging mechanisms, not merely speculative trades, and that CFTC oversight ensures safety. Still, the commission cautioned last fall that platforms should prepare for potential enforcement actions, including shutdowns or penalties—a signal of growing scrutiny.
The economic stakes of unregulated sports event contracts
Congress faces a decision point. With cryptocurrency bills pending, lawmakers could include provisions prohibiting sports event contracts on CFTC-regulated prediction markets. The AGA and IGA describe this as a bipartisan measure that protects the integrity of legal markets.
Regulated sports betting contributes billions annually, funding education, infrastructure, and economic growth. The industry supports 1.8 million jobs, contributes $329 billion to the US economy, and produces $53 billion in taxes. Unregulated contracts divert revenue elsewhere, reducing resources for programs that depend on these funds.
A rare solidarity to protect legal markets
Commercial casinos and tribal operators, typically competitors, are now united against a shared threat to the regulated ecosystem. As debates continue, observers are watching Capitol Hill’s next moves.
The conversation highlights the evolution of betting. Americans wager billions legally each year, but loopholes persist. Clear boundaries could stabilize the market.
Ultimately, the focus remains on player protection and fair play. If Congress acts decisively, it could redefine the boundaries of sports events contracts. Without intervention, gray areas may expand, complicating regulators’ work. The AGA and IGA pledge to continue collaborating and maintaining pressure.
