Two gaming trade groups told Congress on July 21 that sports event prediction markets are cutting into the legal betting system. The American Gaming Association and the Indian Gaming Association said the contracts let operators reach users as young as 18, bypass state and tribal rules, and have already cost states and tribes more than $1.2 billion in gaming tax revenue.
David Bean, the Indian Gaming Association chair, opened by saying Indian Country supports responsible innovation and the use of futures to hedge risk and ensure fair pricing, but opposes sports betting on prediction markets. He said tribal governments turned to gaming in the 1970s to fund services for their citizens, and that legal Indian gaming pays for health care, education, housing, public safety and infrastructure.
Bean also cast tribal gaming as a major employer. He said it has created over 682,000 jobs, and that tribes have worked under the Indian Gaming Regulatory Act for nearly four decades while negotiating agreements with states to regulate gambling. He added that tribes enforce strict age limits and invest in problem-gambling programmes including treatment, education, self-exclusion and training.
In written testimony, Christopher Cylke said the AGA represents the state- and tribal-regulated casino gaming industry, which contributes about $329 billion to the U.S. economy, supports 1.8 million jobs and generates roughly $53 billion in federal, state and local tax revenue each year. He said sports event contracts function as sports wagers in every meaningful sense, but are offered outside the state and tribal regulatory frameworks that govern legal sportsbooks.
The groups said the products are being marketed like ordinary sports betting. According to the testimony, Kalshi ran a World Cup ad urging Americans to “switch” from legal sportsbooks, and prediction market operators accounted for 45% of digital sports betting ads seen by consumers in the first five and a half months of 2026. The testimony said operators are also framing sports betting as investing.
Age limits were a central complaint. Nearly all legal sports betting in the United States is limited to adults 21 and older, while prediction markets can reach users as young as 18. The testimony said Kalshi disclosed that about 4% of its volume comes from users under 21.
The scale has risen quickly. The testimony said trading volume on Kalshi reached $23.7 billion last year and $111 billion in the first six months of 2026, with more than 80% of its activity tied to sports betting. It estimated $2.5 billion in World Cup volume in the past month alone, while Bean said the surge has been explosive over the last 18 months.
The objections were not only about revenue. The testimony said 78% of sports event contract bettors incorrectly believe state gaming regulators can help settle disputes, even though legal sportsbooks operate under rules covering age and identity verification, geolocation, anti-money-laundering compliance, responsible-gaming tools, self-exclusion, advertising standards, suspicious-activity reporting and oversight. Bean urged Congress to advance H.R. 7840, the Event Contract Enforcement Act, and said the CLARITY Act should not be a back door to sports-betting legalization.
The warning landed amid a wider regulatory fight. The Congressional Research Service says sports-based event contracts have become especially popular, account for “more than 85% of Kalshi”:https://www.congress.gov/crs-product/LSB11441’s trading volume, and have grown sharply since 2021. The CFTC proposed on June 12 to clarify which event contracts may be barred as contrary to the public interest, and comments on that proposal are due July 27.
State enforcement is also advancing. On Monday, Washington’s attorney general said a King County Superior Court judge found Kalshi likely violated the state’s gambling and consumer-protection laws and issued a preliminary injunction, with a final order due on August 5. For tribes, the stakes are still rising: the National Indian Gaming Commission said tribal gaming revenue reached a record $46.2 billion in FY2025, up 5.3% from FY2024.
