AGA and IGA Urge Congress to Ban Sports Event Contracts

The American Gaming Association and the Indian Gaming Association are asking Congress to ban "sports event contracts," the sports wagering products sold by prediction market platforms such as Kalshi and Polymarket. The two groups, which normally disagree on sports betting expansion, are jointly pressing the case at a House Agriculture Subcommittee hearing on Tuesday, July 21, 2026, arguing the contracts function as unregulated sportsbooks that dodge state licensing, taxes and consumer protections.

The hearing, titled "Examining Prediction Markets: Customer Protections and Market Integrity in Sports Event Markets," is being held by the House Agriculture Subcommittee on Commodity Markets, Digital Assets and Rural Development at 10 a.m. Eastern. It is the latest round in a year-long fight between the regulated gambling industry and the fast-growing prediction market sector, which has already drawn a federal court loss for Kalshi in New York and a block on Polymarket in France.

Key facts

• Kalshi processes roughly 3 billion dollars in trades a week, according to CDC Gaming's reporting on the AGA and IGA campaign against prediction markets.
• Forty state attorneys general signed an amicus brief opposing sports gambling delivered through prediction markets, and fifteen states are actively litigating against prediction market operators, per the same CDC Gaming coverage.
• On July 8, 2026, U.S. District Judge Analisa Torres denied Kalshi's bid to block New York's gambling enforcement law in Kalshi v. New York State Gaming Commission, a case Kalshi filed in October 2025.

What did the AGA and IGA ask Congress to do at the July 21 hearing?

Both associations submitted testimony asking lawmakers to bar prediction market platforms from listing sports event contracts, treating them as sports bets subject to the same state licensing and taxation as regulated sportsbooks. The two groups rarely align on sports betting policy but have formed a working alliance specifically to fight prediction markets, according to CDC Gaming's coverage of the campaign.

What is a sports event contract, and how is it different from a sportsbook bet?

A sports event contract is a derivative product, structured like a futures contract, that pays out based on the outcome of a sporting event, such as which team wins a game. Functionally it mirrors a moneyline bet at a sportsbook, but it is listed on a CFTC-registered exchange such as Kalshi or Polymarket rather than sold by a state-licensed bookmaker, which is why gaming regulators argue it is sports betting wearing a commodities-market disguise.

Why are the AGA and IGA teaming up against prediction markets?

Both groups say sports event contracts undercut the licensing, tax and consumer protection framework that regulated sports betting operators have followed for years. IGA Chair David Bean framed the stakes in blunt terms.

"Our message is prediction markets are not only eroding tribal sovereignty, but also eroding state sovereignty," said David Bean, Chairman of the Indian Gaming Association.

For tribal gaming operators, the concern is layered: sports event contracts bypass not just state licensing regimes but also the compacts and exclusivity arrangements that underpin the Indian Gaming Regulatory Act, a federal law tribes have relied on for nearly four decades.

Who is expected to testify, and what happens at the hearing itself?

A full witness list had not been published ahead of the hearing, though gaming industry representatives were expected to appear alongside prediction market advocates. The July 21 session follows an earlier, closed-door House Agriculture Committee hearing on April 23, 2026, that drew roughly sixteen members, about a third of the full committee, along with testimony from prediction market proponents and an NFL representative.

How did Kalshi's New York court loss factor into the debate?

On July 8, 2026, Judge Torres of the Southern District of New York rejected Kalshi's request for a preliminary injunction against the state's gambling enforcement law, finding the company had not shown it was likely to succeed on its argument that the Commodity Exchange Act preempts state gambling regulation. The ruling means New York regulators can continue enforcing licensing requirements against prediction markets operating without a state gaming license, and gaming lobbies are citing it in Washington as proof that state gambling law still applies to these products even when they are sold on a federally registered exchange.

What do Kalshi, Polymarket and their supporters argue in response?

Prediction market advocates maintain the CFTC already has exclusive jurisdiction over event contracts and that new legislation is unnecessary. AGA Vice President of Government Relations Tres York told trade press the exchanges have repeatedly tried to move state enforcement cases into federal court and lost, noting, "every single time the prediction market will have to try to get it moved to federal court, and it's always sent back," a pattern he says undercuts the preemption argument. Prediction market operators have also ramped up television advertising and lobbying spend as state enforcement actions have multiplied.

How much money is actually moving through these contracts?

CDC Gaming's reporting on AGA testimony pegs young adult activity, ages 18 to 21, at roughly 120 million dollars a week on prediction market platforms, or about 6.2 billion dollars annualized. Gaming groups point to that age bracket specifically because it falls below the legal sports betting age in most states, even though prediction markets do not apply the same age and identity checks as licensed sportsbooks.

What is the regulated gambling industry's economic argument?

In a joint letter to Congress dated January 12, 2026, AGA President and CEO Bill Miller and IGA Chairman David Z. Bean cited the regulated gaming industry's 329 billion dollars in annual economic impact, 53 billion dollars in tax revenue and 1.8 million supported jobs, arguing that unregulated event contracts erode a tax base states and tribes depend on. The letter, covered by Michigan Gaming, also argued sports event contracts conflict with gambling laws in 39 states, the Indian Gaming Regulatory Act, the federal Wire Act and existing CFTC rules.

How are individual states responding beyond New York?

New York is the most advanced case, but it is not the only one. State gaming regulators in several states have issued cease-and-desist letters to prediction market operators, and the 40-attorney-general amicus brief signals a broader, coordinated legal position among states rather than a single jurisdiction acting alone. Internationally, France's gambling regulator has already blocked Polymarket access, classifying its sports contracts as illegal gambling, a data point U.S. gaming lobbies are using to argue other jurisdictions have already reached the same conclusion.

Regulated sports betting vs. prediction market sports event contracts

Category	Regulated sportsbooks	Prediction market sports event contracts
Primary regulator	State gaming commissions	Commodity Futures Trading Commission
Licensing	State license required in each operating state	Single federal exchange registration, no state gaming license
State and tribal tax revenue	Yes, taxed under state sports betting law	Largely untaxed at the state level, per AGA and IGA
Minimum age	21 in most states	18, per federal commodities rules
Example platforms	DraftKings, FanDuel, BetMGM, tribal sportsbooks	Kalshi, Polymarket
Current legal status in New York	Licensed operators only	Enforcement action upheld against Kalshi, July 2026

Does this connect to the wider prediction markets vs. sportsbooks fight investors are watching?

Yes. Wall Street has already started pricing in the risk. As iGaming Daily News reported, investor Michael Burry has taken positions favoring regulated operators DraftKings and Flutter over prediction market exposure, a bet that a Congressional or judicial crackdown on sports event contracts would benefit licensed sportsbooks at the expense of exchanges like Kalshi.

What would a Congressional ban actually change for bettors and operators?

If Congress acted to bar sports event contracts outright, prediction market platforms would likely have to stop listing sports outcome markets entirely or restructure them to avoid resembling wagers, similar to how they already exclude contracts tied to assassinations or terrorism under CFTC guidance. Regulated sportsbooks and tribal operators would gain protection from a competitor that currently avoids state licensing fees and taxes, while prediction market users would lose access to sports contracts on those specific exchanges, though it would not affect non-sports prediction markets such as election or economic contracts.

What happens next?

No bill banning sports event contracts had passed either chamber as of the July 21 hearing. The Subcommittee on Commodity Markets, Digital Assets and Rural Development can use the hearing to build a record for future legislation, but any ban would still need to clear the full House Agriculture Committee, the House floor, the Senate and a presidential signature. In the meantime, litigation remains the more immediate lever: additional state enforcement actions and court rulings, following the pattern set by Judge Torres in New York, are likely before Congress moves on legislation.

FAQ

What is a sports event contract?

A sports event contract is a derivative product traded on a CFTC-registered exchange that pays out based on a sporting event's outcome, functioning like a sports bet but structured and regulated as a commodities contract rather than as gambling.

Is Kalshi legal in New York?

Kalshi is not licensed as a sports betting operator in New York. On July 8, 2026, a federal judge denied Kalshi's bid to block the state from enforcing its gambling laws against the platform's sports contracts, allowing New York regulators to pursue enforcement.

Who are the AGA and IGA?

The American Gaming Association is the trade group representing the U.S. commercial casino and sports betting industry. The Indian Gaming Association represents tribal gaming operators. The two groups typically disagree on sports betting expansion but have jointly opposed prediction market sports contracts since at least January 2026.

Will Congress ban prediction market sports betting?

It is not yet decided. The July 21, 2026 House Agriculture Subcommittee hearing is a step toward possible legislation, but no bill banning sports event contracts had been passed as of the hearing date, and any ban would require approval from both chambers of Congress.

What is the CFTC's role in this dispute?

The Commodity Futures Trading Commission regulates derivatives exchanges, including the platforms that list sports event contracts. Prediction market operators argue the CFTC already has exclusive authority to oversee these products, while the AGA and IGA argue state gambling law still applies alongside federal commodities rules.

Updated July 2026.