BlockBeats report, June 17: According to The Block, several U.S. gambling industry organizations are urging Congress to include explicit provisions in the upcoming Crypto Market Structure Act to prohibit prediction markets related to sports events and casino betting from being offered as financial products on crypto platforms.
Industry organizations, including the American Gaming Association, the Indian Gaming Association, and the Association of Gaming Equipment Manufacturers, stated in a letter to the Senate that such platforms circumvent state gambling regulatory systems and local licensing requirements by offering nationwide gambling services through forms such as "sports event contracts."
These products disguise sports betting as "financial derivatives," potentially undermining consumer protection mechanisms and posing risks to younger users, while also disrupting traditional gambling industries that rely on local tax revenue and employment. This controversy is unfolding against the backdrop of advancing legislation in the U.S. crypto market. The Senate Banking Committee has already advanced a version of the Clarity Act, which is now set to proceed to a full Senate vote. Meanwhile, debate over whether prediction markets fall under the CFTC’s regulatory jurisdiction continues to intensify.
Meanwhile, the tug-of-war between regulators and platforms is intensifying. Several states have taken enforcement actions against platforms such as Kalshi and Polymarket, while the U.S. Commodity Futures Trading Commission (CFTC) has recently pushed for regulatory adjustments aimed at supporting certain sports-related prediction markets while limiting risk categories.