The American Gaming Association (AGA) leveraged a U.S. Senate hearing this week to sound a significant alarm regarding the swift rise of sports prediction markets. They contend that these platforms are acting as nationwide betting systems, effectively evading the regulatory frameworks established post-PASPA repeal.
During his testimony before the Senate Commerce Committee’s Subcommittee on Consumer Protection, Technology, and Data Privacy, AGA President and CEO Bill Miller articulated that prediction market operators are “rebranding” sports betting as financial instruments, while circumventing state gaming regulations, responsible gaming standards, and tribal laws.
“These offerings operate as sports betting in every substantive way,” Miller stated during the hearing titled No Sure Bets: Protecting Sports Integrity in America. “Consumers wager money on the outcomes of sporting events and individual player performances.”
This testimony arrives coinciding with the activities of companies like Kalshi, which are aggressively expanding their sports event contracts across the U.S., authorized by the Commodity Futures Trading Commission (CFTC), which has led to increasing dissent from gaming regulators, tribal organizations, and state officials.
Miller pointed out that sports betting now constitutes around 86% of Kalshi’s business operations, a sharp rise from almost non-existent levels two years prior.
“In 2024, Kalshi’s sports-related activity was valued at merely $227,000,” Miller elaborated. “Currently, sports betting comprises roughly 86% of their total business and has amassed over $47 billion in trading volume just this year.”
The AGA president emphasized that the rapid growth of sports prediction markets poses a risk to the regulated gaming framework established by states and tribes following the Supreme Court’s 2018 ruling that invalidated the Professional and Amateur Sports Protection Act (PASPA).
Following that decision, 39 states and Washington D.C. legalized sports betting within structured frameworks focused on licensing, geolocation controls, responsible gaming mandates, anti-money laundering protocols, and integrity monitoring.
“States should maintain the autonomy to decide if sports betting can occur within their jurisdictions, and if it can, under which conditions, protections, and regulatory measures,” Miller advised lawmakers.
Throughout the hearing, Miller consistently positioned prediction markets as a tool to evade those crucial state-level regulations by asserting federal commodities legislation.
“Sports betting is being disguised as a financial product, skirting crucial consumer protections, responsible gaming requirements, and the regulatory systems set in place by states and tribes post-PASPA,” he stated.
The testimony also heavily addressed tribal sovereignty, with Miller cautioning that federally regulated prediction markets could jeopardize the gaming compacts and revenue frameworks that tribal governments have developed over decades under the Indian Gaming Regulatory Act.
“For many tribal administrations, gaming revenue is a vital funding source,” Miller noted, indicating that tribal gaming produced over $16 billion in 2025, benefiting healthcare, education, infrastructure, and governmental services.
The AGA raised alarms regarding consumer protection and responsible gaming protocols, particularly surrounding age restrictions. While most legal sportsbooks mandate bettors to be at least 21 years old, prediction market platforms generally permit participation from those aged 18 and up.
“Prediction market platforms allow 18-year-olds to engage nationwide while promoting products that are indistinguishable from sports betting,” Miller emphasized.
Moreover, nearly half of all digital sports betting advertising impressions now originate from prediction market firms, even though these platforms are not bound by the same responsible gaming advertising standards enforced on licensed sportsbooks.
“These platforms aggressively market sports event contracts using terminology that blurs the boundaries between investing and gambling,” Miller cautioned, referencing campaigns that tout “building generational wealth” and “sports betting legalized in all 50 states.”
The testimony consistently returned to concerns over integrity and oversight. Miller argued that regulated sportsbooks have developed advanced systems to identify suspicious wagering activities and collaborate with regulators, leagues, and law enforcement.
“Recent investigations involving athletes, coaches, and dubious betting practices are worrying and should alarm everyone present,” he stated. “These incidents also illustrate why a legal market is not only essential but is functioning effectively.”
In contrast, Miller claimed prediction market platforms lack equivalent enforcement and monitoring mechanisms, exposing consumers to similar integrity risks.
“Given that over 90% of the volume pertains to sports, a match-fixing scandal within prediction markets is merely a question of time,” he predicted.
Miller also pointed out concerns regarding illegal and offshore gambling, which the AGA estimates still constitutes nearly $700 billion in annual wagering by Americans.
The organization urged Congress to uphold state authority over sports wagering, enhance enforcement against offshore contributors, reevaluate the federal excise tax on sports betting, and advocate for legislation like the proposed Prediction Markets Are Gambling Act, introduced earlier by Senators Adam Schiff and John Curtis.
“Sports betting must be conducted within the transparent, accountable frameworks created by state and tribal regulations specifically tailored for responsible management,” Miller concluded. “Cloaked betting operations undermine the efforts and expertise of 8,400 regulatory professionals, the consumer protections embedded in state and tribal law, and the collective will of voters nationwide.”