The US gambling industry has declared war on crypto prediction markets: an attack on Polymarket and Kalshi
The largest gambling associations in the United States — AGA, IGA, and AGEM — have sent a strict demand to the U.S. Senate: ban sports and gaming prediction markets. This move is essentially a direct attack on the rapidly growing sector of decentralized platforms such as Polymarket and Kalshi, which, according to the traditional gambling industry, are illegally encroaching on their territory.
The associations argue that prediction platforms disguise ordinary bets as financial instruments, allowing them to bypass local laws, taxes, and consumer protection rules. They insist that the U.S. Commodity Futures Trading Commission (CFTC) lacks both the resources and the authority to oversee betting. "Congress must confirm: sports betting is not within the CFTC's jurisdiction and cannot be offered through prediction markets," their appeal emphasizes.
The pressure is being applied at a critical moment: the Senate is considering the CLARITY Act, which has already passed a key vote in the banking committee. The gambling lobby is trying to insert a direct ban into it, which could deliver a devastating blow to the entire segment.
Scale of the Threat: Billions at Stake
Prediction markets are experiencing explosive growth. According to my data, in May, trading volume on Kalshi reached $16.8 billion, and on Polymarket — $7 billion. These figures show that the platforms have become full-fledged competitors to traditional bookmakers. If a ban is enacted, it could trigger a massive outflow of liquidity from the legal sphere into gray or unregulated zones.
Notably, Indonesia's Ministry of Communication has already blocked Polymarket, equating it to online casinos. This precedent could serve as a signal for other jurisdictions. The question now is whether the U.S. market, which itself has long been in a "gray zone," can find a compromise or will follow the path of a total ban.
Analytical conclusion: The traditional gambling industry's lobbying is not a fight for morality, but pure economics. They see billions of dollars slipping from their control to decentralized platforms. If the CLARITY Act indeed includes a ban, it will be the largest regulatory blow to the DeFi sector in the U.S. in the past year. However, as history shows, bans rarely stop technology — they merely push it offshore.