- American Gaming Association and Indian Gaming Association urge Congress to ban sports prediction markets
- Gaming groups argue that sports event contracts are indistinguishable from legal sports betting, but unregulated
- Associations want a ban added to the current cryptocurrency market structure bill already in Senate.
Traditional casinos are launching a massive lobbying campaign against blockchain-based wagering.
Two powerful casino trade groups urged the US Senate today to outlaw digital sports-betting forecasting contracts.
Traditional Casinos Target Decentralized Prediction Markets
According to a Semafor report, U.S. gaming organisations are urging Congress to include language in crypto market-structure legislation that would specifically prohibit prediction markets tied to sports and casino-style betting.
Prediction markets have “fuelled the largest expansion of gambling” in U.S. history without adequate voter approval or legislative authorisation, according to a letter to the Senate from industry associations.
The associations included the American Gaming Association, the Indian Gaming Association, and the Association of Gaming Equipment Manufacturers, which Semafor cited.
The lobbying groups argue that sports event contracts mimic traditional sports betting.
But these blockchain-based platforms are not subject to the typical state licensing and supervision.
The trade associations say this is an unfair competitive situation.
Thus, the old casino business is keen to have Congress defend its over-taxed market share.
They claim that the absence of regulations in sports betting severely threatens consumer protection laws.
In addition, executives feel that these digital offerings pose a danger to “the absolute integrity of professional athletic events.”
Currently, global liquidity is surging into decentralized alternatives for sentiment trading.
This quick expansion poses a direct threat to brick-and-mortar sportsbooks’ profits.
Crypto Legislation Faces New Amendment Pressure
Casino advocates want the ban attached to a pending digital asset oversight bill.
In particular, they’re targeting the Senate’s cryptocurrency market-structure framework. The strategy is to limit digital choices prior to enactment of the bill.
Kalshi and Polymarket, if allowed, would be hit hard by the amendment.
The popular venues would no longer be able to specify specific outcomes of competitive events.
This would limit users’ choices regarding hedging portfolio risk.
Meanwhile, industry lawyers say these instruments are already subject to the existing commodities laws.
They think the casino lobby is just attempting to silence innovative financial technology.
Regulatory Fallout for Regulated Prediction Markets
The proposed prohibition is limited to platforms that are regulated by the Commodity Futures Trading Commission.
It clearly bars any agreements involving sports performance or ‘cash’ games at a casino.
This is a general definition that could remove existing legal derivatives products.
As a result, the definition of wagering is sure to be the subject of a heated court battle.
Blockchain advocates often say that prediction websites provide crucial macroeconomic cues and sentiment analysis, helping everyone see what’s going on.
However, there are influential congressional committees in the powerful gaming lobby.
Now, traders have to wait and see what happens to the bill as it heads for a fierce debate in Washington.
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