AGA and IGA team up, call for more scrutiny in prediction markets

• AGA and IGA urge Congress to act in the case of prediction markets
• The trade bodies argue that the platforms are not legal
• Both have enumerated examples where prediction markets fall short of the standards that gambling-sector companies uphold

The American Gaming Association and the Indian Gaming Association joined forces and penned a joint letter in which they appealed to Members of the United States Senate and the House of Representatives to take action on what they described as "unregulated sports events."

Prediction markets come under fire from IGA and AGA once again

The issue, naturally, has to do with the proliferation of sports event contracts, such as the ones offered by Kalshi and Polymarket, including some mainstream sports betting companies that have also launched platforms of their own.

Specifically, the signatories have questioned the proliferation of prediction markets, arguing that they were based on thin legal grounds. In the letter, AGA and IGA stated:

"This growth has occurred by exploiting regulatory inaction by the Commodity Futures Trading Commission (CFTC), which undermines state law and tribal sovereignty and flies in the face of existing federal laws and regulations intended to protect consumers and the integrity of our nation’s financial markets."

AGA and IGA both pointed out the merits of the regulated gambling industry, which generates more than $329bn in economic impact, and contributes $53bn in taxes, along with more than 1.8m jobs created as a result.

The criteria for running a gambling operation were strict, the signatories pointed out, arguing that the minimum legal gambling age was 21+ in most jurisdictions, that licensing and sustainability requirements for operators were demanding, and there were specific robust processes, such as AML and KYC, that companies maintained fully.

CFTC regulation just doesn’t cut it, argue trade bodies

These measures, argue the AGA and IGA, are lacking, adding: "In contrast, several CFTC-registered prediction market platforms have made self-certified event contracts available to anyone 18 and over, in all 50 states, circumventing state and tribal gaming laws and denying states and tribes hundreds of millions of dollars of critically needed revenue for schools, roads, and first responders."

This is not the only instance of objection to the prediction market platform. 39 attorneys general signed a letter, backing Maryland’s fight against the sector, arguing that these platforms were indeed illegal.

Multiple legal actions have flared up all across the country, with Massachusetts, New Jersey, and Nevada just among some of the states to have brought the matter to the courts.

"And while the gaming industry has focused our efforts on stopping unregulated sports wagering, we have seen a troubling proliferation of other concerning betting categories that seek to capitalize on tragedy, invite manipulation, and undermine public trust," the letter further argued.

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