Gaming groups argue CFTC lacks authority over sports betting, citing $1.08 billion in lost state tax revenue from prediction markets.
The American Gaming Association and other industry groups urged Congress to ban prediction markets from sports betting under the CLARITY Act. The push follows CFTC Chair Michael Selig’s claim of exclusive jurisdiction over platforms like Kalshi and Polymarket, clashing with state regulators.
States have reportedly lost $1.08 billion in tax revenue since prediction markets began offering sports event contracts. The letter argues the CFTC lacks expertise and infrastructure to oversee nationwide sports wagering, where state and tribal systems already exist.
The CLARITY Act, aimed at shifting digital asset regulation from the SEC to the CFTC, passed the House in July 2025 but faces delays over stablecoin and ethics concerns. Lawmakers expect a vote by August, though federal-state regulatory disputes persist.