AGA testifies before Congress, calls for crackdown on prediction market sports betting

The American Gaming Association (AGA) has formally asked Congress to intervene against prediction market platforms that offer sports wagering under the guise of financial contracts regulated by the Commodity Futures Trading Commission (CFTC).

In testimony delivered to a Senate Agriculture subcommittee, Christopher Cylke, the AGA's Senior Vice President of Government Relations, argued that platforms such as Kalshi and Polymarket are exploiting federal event-contract rules to bypass state and tribal gambling oversight. “Sports betting on prediction markets makes a mockery of congressional intent,” Cylke said. He added that such products amount to “sports betting, plain and simple.”

The scale of the activity

According to the AGA's testimony, Kalshi alone generated $23.7 billion in trading volume last year, surging to $111 billion in the first six months of this year. More than 80% of that activity is linked to sports outcomes, including an estimated $2.5 billion in World Cup related volume during the past month.

Unlike regulated sportsbooks, prediction markets treat these wagers as derivatives contracts. Users stake money on game results, player statistics, and other sporting events in exchange for a payout — a structure the AGA says is functionally identical to traditional sports betting.

Revenue losses and regulatory gaps

The association estimates that states and tribes have collectively lost more than $1.2 billion in gaming tax revenue since prediction markets began offering sports contracts. These platforms remain accessible in jurisdictions that have either banned sports betting or imposed restrictions, thereby undermining state licensing, tax systems, and tribal gaming compacts established after the 2018 repeal of the federal sports betting prohibition.

Consumer protection concerns

Prediction markets also raise age-limit issues. While most regulated sportsbooks require users to be 21, platforms like Kalshi accept customers as young as 18. Kalshi has disclosed that roughly 4% of its volume is generated by users under 21.

During the first five and a half months of this year, prediction market operators accounted for 45% of all digital sports betting advertisements seen by consumers, yet they are not subject to state responsible gaming advertising requirements. The AGA cited a survey finding that 78% of sports contract users mistakenly believed that state gaming regulators could resolve disputes related to these platforms.

Bipartisan support for action

A coalition of 41 state attorneys general — from both parties — has sent a separate warning to the CFTC, arguing that sports prediction markets bypass state consumer protections and evade tax obligations.

The AGA is urging Congress to formally designate sports event contracts as gambling and to prohibit CFTC-registered platforms from listing such products through self-certification. Cylke said this would “protect your constituents, respect tribal sovereignty, preserve state authority, safeguard sports integrity,” and refocus the CFTC on its intended mission.