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Congress is weighing whether sports prediction markets should remain under federal commodities oversight or be treated more like traditional sports betting, a debate that could shape how platforms such as Kalshi and Polymarket operate in the U.S.
At a recent congressional hearing, lawmakers from both parties questioned whether sports event contracts are meaningfully different from sportsbook wagers. Rep. Dusty Johnson said the core issue is whether these products are sports betting or “an innovative financial product” and whether current laws and regulators are equipped to draw that line.
The dispute centers on who should regulate the market. Supporters of the current framework say the Commodity Futures Trading Commission can oversee these contracts, while critics argue sports-related offerings should face the same rules, taxes, and consumer protections that apply to licensed sportsbooks.
Christopher Cykle of the American Gaming Association told lawmakers that sports prediction markets are effectively offering gambling products while avoiding sportsbook requirements. David Bean of the Indian Gaming Association also questioned whether the CFTC has the staffing and systems needed for close oversight, saying the agency relies on companies to self-certify.
Others defended the federal approach. Former CFTC general counsel Robert Schwartz said the agency has adapted to new financial products over time and works with the National Futures Association as part of its oversight structure. Former CFTC special counsel Carl Kennedy said customer protections already apply in these markets, as they do in other derivatives markets.
The issue has grown more urgent as the platforms expand. According to the hearing record cited in the report, Kalshi said it added 3 million new users over the last month. A Pew Research Center analysis referenced in the article said sports wagers make up a majority of activity on Kalshi and a significant share on Polymarket.
For players, the main question is whether sports prediction markets will eventually be held to the same responsible gambling standards and state-level rules as sportsbooks. That remains unresolved. Congress has not passed new legislation, and states are still pursuing their own lawsuits and proposals to limit sports event contracts.
What to watch next is whether lawmakers move from oversight questions to a formal bill, and whether the balance of power stays with the CFTC or shifts toward state gambling regulators.
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Source: As reported by AUSTIN DENEAN.
