The American Gaming Association (AGA) has told Congress that the Commodity Futures Trading Commission (CFTC) is moving beyond its intended remit by allowing sports-related prediction markets to operate under federal derivatives rules.
AGA CEO Bill Miller gave evidence to the Senate Subcommittee on Consumer Protection, Technology and Data Privacy during a hearing focused on whether platforms offering sports event contracts should be treated as financial exchanges or gambling operators.
The dispute has become one of the most active regulatory issues in the US betting sector, with operators such as Kalshi and Polymarket arguing that event contracts are federally regulated products, while state gaming regulators and casino industry groups argue that sports markets replicate wagering without state-level consumer safeguards.
Miller said the CFTC was created to “regulate markets critical to the functioning of the nation’s economy, not to regulate ‘Monday Night Football.’”
The CFTC has authority over US derivatives markets, but Congress amended the Commodity Exchange Act in 2010 to allow the agency to prohibit contracts linked to gaming, terrorism, assassination, war and unlawful activity.
Senator Maria Cantwell said the CFTC’s 2011 rule had prevented sports betting contracts for more than 15 years before prediction markets began listing sports products in 2025.
Mary Beth Thomas, Executive Director of the Tennessee Sports Wagering Council, said prediction markets do not face the same gambling-specific obligations around integrity monitoring, cybersecurity and responsible gambling.
Patrick McHenry, Senior Adviser for the Coalition for Prediction Markets, disputed that position, stating that federally regulated platforms follow know-your-customer and anti-money laundering requirements.
The coalition includes companies such as Kalshi, Crypto.com, Robinhood, Coinbase and Underdog.
The hearing comes as state officials increase pressure on the CFTC. Miller said 41 state attorneys general have urged the agency to stop asserting control over products they view as gambling.
The debate has also moved into the courts. Yesterday, the CFTC sued Minnesota over a new felony prediction market ban, arguing that the measure conflicts with federal derivatives law.
Who else is piling on the pressure?
Prior to the hearing, the Gambling Is Not Investing coalition sent a letter to the Senate Commerce Subcommittee on Consumer Protection, Technology and Data Privacy.
The coalition wrote: "Prediction markets are rapidly expanding access to sports gambling while operating outside the safeguards and accountability standards required of licensed sportsbooks.
"By offering sports event contracts under the guise of 'trading' or 'investing,' these platforms are effectively creating a parallel sports betting market that lacks the consumer protections, responsible gaming measures, and regulatory oversight that states and tribal gaming authorities have spent years building."
The CFTC has roughly 500 staff, a figure Miller compared with Pennsylvania’s larger state gambling regulatory workforce
