The US gambling lobby is attacking crypto prediction markets: the battle for sports betting
The largest U.S. gambling associations — AGA, IGA, and AGEM — have joined forces to block the legalization of sports-related prediction markets. In a joint appeal to the Senate, they demand that a ban on such platforms be included in the new cryptocurrency regulation bill, the CLARITY Act.
The essence of their complaints is simple: according to the gambling lobby, platforms like Kalshi and Polymarket disguise ordinary bets as "financial products." This allows them to bypass local laws, taxes, and consumer protection rules that are mandatory for traditional bookmakers. Moreover, the organizations claim that the U.S. Commodity Futures Trading Commission (CFTC) simply lacks the resources for adequate oversight of this sector.
Why is this important?
The CLARITY Act, which has already passed a key vote in the Senate Banking Committee, aims to bring clarity to cryptocurrency regulation. However, the gambling industry sees it as a loophole for the uncontrolled expansion of the gambling market. Their key argument: "Congress must confirm that sports betting is not within the CFTC's jurisdiction and cannot be offered through prediction markets."
The numbers speak for themselves. In May, trading volume on Kalshi reached $16.8 billion, and on Polymarket — $7 billion. These are massive flows that bypass state treasuries and federal taxes. Unsurprisingly, traditional market players are sounding the alarm.
Against this backdrop, the recent blocking of Polymarket in Indonesia, where the platform was equated to an online casino, looks like a precedent. If U.S. regulators follow the same path, it would be a serious blow to the entire decentralized prediction industry.
My analysis: The conflict between the traditional gambling business and crypto prediction markets is a classic battle for market share. Gambling giants do not want to lose control over sports betting, but their arguments about "consumer protection" seem like an attempt to stifle innovation. Prediction markets are not just gambling; they are a powerful tool for risk hedging and data collection. If the U.S. imposes a ban, it will only push capital into offshore and decentralized protocols that cannot be blocked.