Crypto Bill Showdown: Gaming Giants vs. CFTC—Who Gets to Rule Prediction Markets?

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By: Elena Rostova

The Senate’s crypto market structure bill is stuck in a regulatory deadlock. Gaming industry groups want to ban sports prediction markets. The CFTC defends its right to oversee them. This fight will shape crypto market rules for years.

Three major gaming groups sent a letter to the Senate. They are the American Gaming Association, Indian Gaming Association, and AGEM. They asked for language banning sports and casino-style event contracts. They claim prediction platforms expand gambling without voter approval. These platforms skip state and tribal rules. They market bets as investments, risking young users. The CFTC disagrees. It says it has authority over sports contracts. It sued six states (Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico) over restrictions. Last week, it proposed rules allowing sports contracts but banning those tied to terrorism or war. Kalshi and Polymarket are top operators—Kalshi had $16.81 billion in May volume, Polymarket $7.08 billion.

The Clarity Act waits for a full Senate vote. If gaming groups win, prediction markets could be banned nationwide. If the CFTC prevails, it will regulate them. But states may keep pushing back. This outcome will set a precedent for U.S. crypto market regulation.

Author bio: Elena Rostova, a public policy expert specializing in compliance assessments for governments and sovereign wealth funds.