The American Gaming Association (AGA) and the Indian Gaming Association (IGA) are calling on Congress to step in as crypto-based prediction markets roll out a new wave of sports-betting-style contracts, saying these products could sidestep and weaken state and tribal gaming laws.
In a joint letter sent to lawmakers in both chambers, the two groups asked that the issue be addressed as part of cryptocurrency legislation currently moving through Congress.
“We write to urge timely congressional action to address the explosion of unregulated sports event contracts being offered by prediction markets,” the groups wrote.
Today, the AGA and Indian Gaming Association sent a letter urging Congress to use cryptocurrency market structure legislation to end nationwide sports betting disguised as “event contracts.”
Read the letter https://t.co/iUZ3qSgw4T
— American Gaming Association (@AmericanGaming) January 12, 2026
The groups say these contracts look and act a lot like regular sports bets, but they’re being offered outside the rules that licensed sportsbooks have to follow. What started early last year as simple bets on who would win a game has since grown into more complicated options, including parlays and even contracts tied to where players might end up.
“Since these contracts, that are indistinguishable from legal sports betting, were launched last January, they have grown exponentially in trading volume and have expanded beyond the outcome of single games to include complex parlays and even potential wagers on the collegiate transfer portal,” the letter stated.
The groups also argue that prediction market platforms registered with the Commodity Futures Trading Commission are taking advantage of weak enforcement to push the boundaries of what they’re allowed to offer.
“This growth has occurred by exploiting regulatory inaction by the Commodity Futures Trading Commission (CFTC), which undermines state law and tribal sovereignty and flies in the face of existing federal laws and regulation intended to protect consumers and the integrity of our nation’s financial markets,” they wrote.
Gaming groups call on Congress to crackdown on crypto prediction markets
They say Congress now has a chance to step in by putting limits on these products into the crypto market legislation that’s currently moving through Capitol Hill.
“We firmly believe that congressional consideration of cryptocurrency market structure legislation provides an important, bipartisan opportunity to prevent sports betting and casino gambling under the guise of ‘event contracts,’” the groups said.
The AGA and IGA say regulated gaming companies have to play by a long list of rules designed to protect consumers, while prediction market platforms face far fewer limits, from lower age requirements to looser compliance standards. They argue that this lets the platforms sidestep state and tribal authority and avoid paying taxes that help support public services.
In their letter, the groups also say these contracts break a range of federal and state laws, including the Commodity Exchange Act, the Indian Gaming Regulatory Act, and the Wire Act. They point out that several state attorneys general have already said the platforms are operating illegally.
They also warn that prediction markets are starting to move into more sensitive territory, including bets tied to foreign conflicts and political figures.
“Most recently, questions and concerns have been raised regarding contracts tied to the capture of Venezuelan President Nicolas Maduro and ongoing armed conflicts abroad – categories that would never be permitted under state or tribal law,” the letter said.
The groups warned that the platforms blur the line between gambling and investing while exposing consumers to serious risks.
“These contracts are being offered in flagrant disregard of state laws, tribal sovereignty, the Commodity Exchange Act, and CFTC regulations,” the letter stated, adding that they “mislead consumers into believing that a sports bet is an investment, fail to protect the young and the vulnerable, open the door to money laundering, match fixing and insider trading.”
The letter also cited comments by CFTC Chairman Michael Selig during his confirmation hearing, saying he would defer to Congress while related lawsuits are pending.
“During his confirmation hearing, Chairman Selig made it clear that the CFTC would not rein in sports betting contracts under his leadership, instead deferring to the outcome of litigation that could take years to be fully resolved,” the groups wrote. “However, Mr. Selig also said that the CFTC would follow Congress if they were to step in and speak on these contracts.”
The organizations urged lawmakers to explicitly bar gambling-style contracts on CFTC-regulated platforms.
“Therefore, it is critical that Congress act swiftly to include legislative language in the cryptocurrency market structure legislation that reenforces existing law and prohibits gaming through CFTC-registered platforms,” the letter said.
The letter was signed by Bill Miller, president and CEO of the American Gaming Association, and David Z. Bean, chairman of the Indian Gaming Association.
Featured image: American Gaming Association / Indian Gaming Association
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