Several US gambling industry groups, tribal associations, and labor unions are pressing Congress to insert language into pending crypto legislation that would explicitly restrict platforms such as Kalshi from offering sports-related prediction products. The dispute has moved beyond sports wagering. It now centers on whether prediction markets should be handled under financial regulation or state gambling law.
Industry coalition wants explicit ban language
According to reports, the coalition includes the American Gaming Association, the Indian Gaming Association, the Indiana Gaming Association, the AFL-CIO's Hotel and Gaming Trades Council, and UNITE HERE. The groups argue that prediction markets have expanded gambling activity across the US over the past 18 months without direct voter approval or specific legislative authorization.
Their position is that sports betting should remain under state gaming laws rather than fall under federal prediction market rules. If that language is added to the final bill, operators offering sports-linked event contracts could face tighter limits. Kalshi is the platform most often mentioned in the current debate.
State revenue claims are a major part of the fight
Tax revenue is one of the strongest arguments raised by the gaming sector. The American Gaming Association previously estimated that states have lost about $1 billion in gambling-related revenue since early 2025 because of prediction markets. Licensed sportsbooks say they operate under state taxes, compliance rules, and consumer protections that may not apply in the same way to prediction platforms.
That claim is not uncontested. The source material says the owner of the prediction market has cast doubt on both the revenue-loss estimate and the broader allegations from gaming groups. That has pushed the fight into a larger regulatory question, not just a commercial one.
CFTC authority is at the center of the dispute
Another key issue is the authority of the US Commodity Futures Trading Commission, or CFTC. In its letter, the coalition argues that sports betting falls outside CFTC jurisdiction. Based on that view, Congress should make clear that sports betting cannot be offered through prediction market structures.
Backers of event contracts take a different line. They argue that such contracts can serve forecasting and risk-management purposes, which means they do not fit neatly into a standard gambling category. That split matters. One side frames these products as gambling under state law, while the other treats them as a distinct kind of market instrument.
Final bill text could shape the future of event contracts
The crypto bill under discussion in Congress has not been finalized. As the measure described as the 2026 crypto bill moves forward, traders and market participants will be watching for any language that directly addresses prediction markets in the final version.
Any restriction on sports-related event contracts could affect the business model of platforms like Kalshi and influence how future sports betting rules are drawn in the US. For market participants, the central question is simple: whether Congress writes that restriction into law.