American Gaming Association (AGA) President and CEO Bill Miller, as well as Indian Gaming Association (IGA) Chairman David Bean, issued a letter to US lawmakers urging them to take action against unregulated prediction market offerings.
“On behalf of the (AGA) and…(IGA), we write to urge timely congressional action to address the explosion of unregulated sports event contracts being offered by prediction markets. Since these contracts, that are indistinguishable from legal sports betting, were launched last January, they have grown exponentially in trading volume and have expanded beyond the outcome of single games to include complex parlays and even potential wagers on the collegiate transfer portal,” Miller and Bean said.
“This growth has occurred by exploiting regulatory inaction by the Commodity Futures Trading Commission (CFTC), which undermines state law and Tribal sovereignty and flies in the face of existing federal laws and regulation intended to protect consumers and the integrity of our nation’s financial markets. We firmly believe that congressional consideration of cryptocurrency market structure legislation provides an important, bipartisan opportunity to prevent sports betting and casino gambling under the guise of ‘event contracts.’”
Both entities believe the CFTC has yet to approve or review the event contracts currently listed on prediction markets platforms, even as more operators continue to join the space and “their offerings get more audacious.”
Miller and Bean explained how the CFTC’s own regulations forbid event contracts related to terrorism, assassination, war, gaming or an activity that is unlawful under state or federal law, according to the Commodity Exchange Act.
The AGA and IGA continued: “They violate the Indian Gaming Regulatory Act that gives Tribes exclusivity to offer gaming products on their land. Sports event contracts also violate the federal Wire Act that makes it illegal to offer sports wagers across state lines.
“And while the gaming industry has focused our efforts on stopping unregulated sports wagering, we have seen a troubling proliferation of other concerning betting categories that seek to capitalize on tragedy, invite manipulation and undermine public trust.
“These contracts are being offered in flagrant disregard of state laws, Tribal sovereignty the Commodity Exchange Act and CFTC regulations. They mislead consumers into believing that a sports bet is an investment, fail to protect the young and the vulnerable, open the door to money laundering, match fixing and insider trading. They rob state budgets and Tribal finances while simultaneously forcing states and Tribes to expend massive legal resources to defend their sovereignty.”
Miller and Bean confirmed both organizations are prepared to work with lawmakers to create improved regulation around prediction markets.
Zitro joined the AGA as its newest member on December 17, where the supplier will now participate in advocacy efforts, exchange best practices with fellow gaming entities and contribute to policy discussions
