The U.S. gambling lobby has declared war on crypto prediction markets: sports betting in the crosshairs
American gambling associations — AGA, IGA, and AGEM — have sent a strict demand to the U.S. Senate: ban prediction markets related to sports and gambling as part of a new cryptocurrency regulation bill. This is not just a request, but a direct attack on a rapidly growing sector that, according to lobbyists, illegally expands the boundaries of betting without approval from state authorities and voters.
The key argument of the gambling industry is that platforms like Kalshi and Polymarket disguise ordinary bets as financial instruments, evading taxes, local laws, and consumer protections. They also claim that the U.S. Commodity Futures Trading Commission (CFTC) simply lacks the resources to adequately oversee this market. In their letter, the organizations directly state: "Congress must confirm that sports betting is not within the CFTC's jurisdiction and cannot be offered through prediction markets."
This demand comes amid the advancement of the CLARITY Act, which has already passed a key vote in the Senate Banking Committee. If it is adopted with such amendments, it will be a serious blow to the industry. To recall, in May, trading volume on Kalshi reached $16.8 billion, and on Polymarket — $7 billion. These are enormous figures that show how quickly prediction markets are eating into the share of traditional gambling.
Interestingly, pressure is already being felt on the international stage. In May, Indonesia's Ministry of Communications blocked Polymarket, equating the platform to an online casino. This is a signal: regulators worldwide are beginning to see these instruments not as an innovation, but as a threat.
My analysis: The U.S. gambling lobby is sounding the alarm for a reason. Prediction markets are not just "sports betting," but a new class of derivatives that breaks down traditional boundaries between finance and gambling. If the CLARITY Act indeed bans these markets, we will see a massive outflow of liquidity to unregulated jurisdictions or decentralized platforms that cannot be blocked. This is a classic game of cat and mouse, where the winner will be the one who adapts faster.