Gaming groups urge Congress to ban prediction markets sports betting in CLARITY Act

Gaming industry groups urged the U.S. Senate this week to clarify that the Commodity Futures Trading Commission (CFTC) lacks authority over prediction markets, as detailed in proposed legislation known as the CLARITY Act. These groups, including the American Gaming Association (AGA) and the National Council on Problem Gambling (NCPG), expressed concerns that the CFTC's potential oversight could inadvertently legitimize or expand sports betting in the United States. The AGA stated that the CLARITY Act, if passed, would "ensure that the CFTC does not expand its jurisdiction into areas that are already well-regulated at the state level, such as sports wagering." The organizations are advocating for a clear distinction between prediction markets and traditional sports betting, emphasizing that the latter is subject to robust state-level regulatory frameworks. They argue that allowing the CFTC to regulate prediction markets could create a "regulatory arbitrage" opportunity, potentially undermining existing state laws and consumer protections. The push comes amid ongoing discussions in Congress about the future of digital assets and market regulation, with prediction markets often falling into a gray area of oversight. The industry's stance is that any expansion of gambling-related activities should be handled through established state regulatory channels, not by federal agencies like the CFTC.