A group of major US gaming and labour organisations, including the American Gaming Association, the Indian Gaming Association, the AFL-CIO's Hotel and Gaming Trades Council, and UNITE HERE, directed a joint letter to Congress on June 16, urging lawmakers to embed language in the pending crypto bill that would shut sports betting out of federally regulated prediction market platforms. The move represents the gaming industry's most sustained and coordinated push into federal legislation on prediction markets, a fight that has been building since prediction market platforms began processing sports contracts at scale.

The Bill and the Battleground

The Digital Asset Market Clarity Act (CLARITY Act) is the primary US legislation seeking to define which federal regulator oversees different categories of digital assets. The House passed its version in July 2025 with a 294 to 134 vote. The Senate Banking Committee advanced its own version on May 14, 2026, and the bill now awaits consideration by the full Senate. Because the legislation would expand the Commodity Futures Trading Commission's jurisdiction over digital commodity spot markets, it creates a statutory opening to either enshrine or limit prediction market activity within federal law. Gaming industry lobbyists see a Senate floor amendment as their best opportunity to lock in restrictions that would be difficult to reverse later.

The coalition's letter argued that prediction markets have driven what the groups described as the largest expansion of gambling in US history over the past 18 months, and that this expansion has occurred without the voter approval or legislative authorisation that has governed traditional sports betting. As context, the legal framework for state-regulated sports betting dates to the Supreme Court's 2018 ruling striking down the Professional and Amateur Sports Protection Act; the coalition's letter does not itself cite that ruling, but the consumer-protection argument the groups make tracks closely against the authorisation structures that followed it. The AGA estimates that states have collectively lost approximately one billion dollars in gaming revenue to these platforms since early 2025, though prediction market operators dispute that figure.

"Congress should use crypto legislation to reaffirm a simple principle: sports betting falls outside the CFTC's remit and cannot be offered through prediction market platforms," the coalition's letter stated.

The CFTC Is Moving in the Opposite Direction

The coalition's push arrives at a moment of direct conflict with the CFTC itself. On June 10, the agency published a proposed rule that would legalise most sports prediction market contracts, classifying them as derivatives that contribute to price discovery. The rule would only restrict contracts that are uniquely vulnerable to manipulation, such as those settled on individual player injuries or officiating decisions. CFTC Chair Mike Selig, appointed under the Trump administration, reversed roughly 15 years of agency enforcement posture to reach this position.

Senators Adam Schiff of California and John Curtis of Utah introduced the Prediction Markets Are Gambling Act in March 2026, the first bipartisan Senate bill to directly target prediction market regulation. Their legislation would prohibit CFTC-registered entities from listing any prediction contracts that function like sports bets or casino-style games. Schiff argued that sports prediction contracts are simply sports bets operating under a different name, and that the CFTC is effectively greenlighting these markets. Critics of the agency's new posture, including Schiff, contend that this approach allows prediction platforms to bypass the state-level gambling authorisation frameworks that have governed the industry since 2018.

Former US Representative Patrick McHenry now lobbies for the Coalition for Prediction Markets, the industry group pushing back on these efforts. Supporters of prediction markets argue that the platforms aggregate public information and produce genuine price signals, and that treating them as gambling misunderstands their function.

Market Scale Frames the Stakes

The volume of activity on these platforms makes the regulatory question harder to ignore. Combined monthly trading on Kalshi and Polymarket grew from under five billion dollars in September 2025 to more than ten billion dollars in May 2026. Sports contracts alone account for roughly 80 percent of Kalshi's total volume. Super Bowl contracts in early 2026 generated more than one billion dollars in trades; March Madness topped one hundred million. The broader prediction markets sector carries a valuation near twenty billion dollars, according to industry estimates, with global volumes reaching forty-four billion dollars in 2025. That figure represents a 130-fold increase from early 2024, illustrating the speed at which these platforms have scaled.

Prediction markets currently allow participation at age 18, while most US states with legalised sports betting set the minimum age at 21. That gap has become a central consumer protection argument for critics.

On Polymarket's own platform, the CLARITY Act's chances of passing in 2026 are priced at approximately 55 percent. Kalshi's implied odds sit closer to 38 percent. Both figures come from platforms that would be directly affected by the legislation under consideration, which gives those probability estimates an inherent conflict of interest. The gaming industry's new push on this amendment adds fresh uncertainty to both.

Implications Beyond the US

The outcome carries real consequences for markets outside North America. India moved decisively in April and May 2026: the Ministry of Electronics and Information Technology classified prediction markets as prohibited online money gaming under the Promotion and Regulation of Online Gaming Act 2025, which took effect May 1. Polymarket is now blocked for Indian users, with Kalshi facing a similar order. More than ten countries have restricted or banned the platforms, seven of them in 2026 alone, and at least eleven US states have issued cease-and-desist orders targeting sports contracts specifically.

In West Africa, the picture is different but not reassuring. Luno launched a structured prediction markets product in Nigeria in March 2026, joining Bayse Markets (formerly Gowagr) as an active player in that space. Nigeria's ongoing naira devaluation has made crypto-denominated products broadly attractive, expanding the potential user base for these platforms. Ghana has no specific regulation covering them yet, despite research showing that 71 percent of Ghanaian youth have placed bets and 84 percent of young bettors display signs of problematic gambling.

The regional data elsewhere points in the same direction. In South Africa, 83 percent of young people report having gambled. In Kenya the figure stands at 79 percent, and Kalshi restricts access there under its terms of service, though VPN workarounds are common in that market.

For developers in South Asia and sub-Saharan Africa building products on Kalshi or Polymarket's infrastructure, the amendment fight matters directly. A CLARITY Act that includes gaming restrictions would validate foreign blocking orders and could push Web3 prediction market development toward decentralised, permissionless protocols that are far harder to restrict by jurisdiction. A bill that passes without those restrictions would entrench the current regulatory framework and increase pressure on countries like Nigeria and Ghana to either act or stand aside.

The Senate floor vote has no confirmed date as of publication.