The US gambling industry has declared war on crypto prediction markets: pressuring the Senate
Influential American gambling associations — AGA, IGA, and AGEM — have joined forces and sent an open letter to the U.S. Senate demanding a ban on sports prediction markets. This move comes amid the advancement of the CLARITY Act bill, which aims to bring clarity to the regulation of cryptocurrencies and related sectors.
The main argument of the gambling lobby: platforms like Polymarket and Kalshi, disguising bets as financial derivatives, are effectively creating an unregulated gambling market. They circumvent local laws, tax obligations, and consumer protection standards by operating in a legal "gray zone." The organizations emphasize that the Commodity Futures Trading Commission (CFTC) simply lacks the necessary resources and expertise to oversee betting.
"Congress must clearly establish: sports betting is not within the CFTC's jurisdiction and cannot be offered through prediction markets," the appeal states.
The demand comes at this particular time for a reason. The CLARITY Act bill, recently approved by the Senate Banking Committee, could either legalize or severely restrict the activities of such platforms. The gambling industry fears that without a clear ban, prediction markets will turn into a large-scale alternative to traditional bookmakers.
The scale of the threat is obvious. Segment leaders are showing explosive growth: in May, trading volume on Kalshi reached $16.8 billion, and on Polymarket — $7 billion. This is already comparable to the turnover of major legal operators. Notably, Indonesia has already taken the path of a direct ban, blocking access to Polymarket and equating it to online casinos.
My analysis: The gambling lobby in the U.S. holds enormous political weight, and its attack on prediction markets is not just about protecting business, but an attempt to prevent the emergence of a new, more flexible, and decentralized competitor. The question is whether the crypto industry can prove that prediction markets are not gambling, but a tool for hedging and information gathering. The outcome of this battle will determine whether Polymarket and Kalshi remain in the U.S. or retreat into an offshore shadow.