Gambling lobbying in the U.S. hits crypto prediction markets: a war for control over bets
The American gambling industry has gone on the offensive against cryptocurrency sports prediction platforms. Leading industry associations — AGA, IGA, and AGEM — have sent an official appeal to the U.S. Senate demanding a ban on so-called "prediction markets" in sports and gambling as part of a new crypto regulation bill. Their main argument: these platforms illegally expand the boundaries of gambling, bypassing voter control and state authorities.
In essence, gambling giants see Kalshi and Polymarket as direct competitors that disguise ordinary bets as financial derivatives. This allows them to evade local licensing, taxes, and consumer protection standards. The letter's authors insist that the U.S. Commodity Futures Trading Commission (CFTC) simply lacks the resources and authority to adequately oversee betting.
"Congress must clearly state: sports betting is not within the CFTC's jurisdiction and cannot be offered through prediction markets," the appeal states.
This pressure is unfolding against the backdrop of the advancement of the CLARITY Act, which has already received approval from the Senate Banking Committee. If the gambling lobby gets its way, it will be a serious blow to the decentralized prediction segment.
It is worth noting the scale of the threat to traditional gambling: in May, trading volume on Kalshi reached $16.8 billion, and on Polymarket — $7 billion. These figures show that crypto prediction markets have already outgrown the status of a niche hobby and turned into a full-fledged financial sector.
Unsurprisingly, regulators around the world are eyeing this sector. Recall that Indonesia has already blocked Polymarket, equating the platform to an online casino. This is a signal: prediction markets are balancing on a fine line between innovation and prohibited gambling.
My analysis: The battle for the legality of crypto predictions is just beginning. Gambling lobbying in the U.S. is extremely strong, and if the CLARITY Act includes a ban on sports prediction markets, it will set a dangerous precedent. Polymarket and Kalshi will face dual pressure — from traditional gambling and regulators. In the coming months, we will see whether the crypto community can defend the right to decentralized predictions as a form of financial instrument rather than gambling.