Prediction markets firms take heat in Senate Commerce hearing scrutinizing surge Sports betting on firms such as Kalshi was the focus of questions over advertising to children, cheating from athletes and undermining regulated gaming.
What to know: – The fast-growing prediction markets sector where users bet on the outcome of events, including in sports and politics, was the focus of a hearing from the U.S
Senate Commerce Committee. – Lawmakers from both parties were critical of cheating scandals, advertising practices and the potential for the industry to undermine gaming regulated by the states and tribes. Prediction markets platforms such as those run by Kalshi and Crypto.com drew two hours of critical questioning in a U.S. Senate Commerce Committee hearing, including scrutiny on the platforms’ advertising practices, regulatory disputes and the cheating they may encourage. “We want athletes competing on merit, but the opportunity to make money can tempt gamblers — and sometimes even athletes themselves — to guarantee a sure bet,” Senator Ted Cruz, a Texas Republican who chairs the committee, said during the Wednesday hearing.
He said high-profile incidents of player cheating “sow doubt in the minds of fans.” Cruz flagged some recent cases, saying: “NBA players and coaches are accused of manipulating performance and providing insider information to win bets. Two major league baseball pitchers allegedly rigged their own pitches in exchange for money. [Major League Soccer] banned two players for intentionally getting yellow cards to win bets, and the UFC has canceled matches and terminated contracts because of suspected match fixing.” “It is not uncommon for fans scrolling Twitter on a Sunday afternoon in the fall to see posts speculating that a controversial call by an official was related to gambling,” Cruz said. Other lawmakers focused on marketing that fosters problem gambling or that has reached youths that are otherwise meant to be blocked from betting….