U.S. House to Scrutinize Sports Prediction Markets as Legal and Regulatory Pressure Builds

The U.S. House Agriculture Committee will hold a hearing tomorrow on sports prediction markets, as disputes intensify over whether sports event contracts should be treated as federally regulated derivatives or as sports betting. The session comes amid mounting challenges involving platforms such as Polymarket and Kalshi. The hearing will be convened by the committee's Subcommittee on Commodity Markets, Digital Assets, and Rural Development. Lawmakers plan to review customer protections and market integrity, alongside the legal status of sports-related event contracts. The witness roster includes legal specialists and representatives from American and Indian gaming associations, groups that have been urging Congress to prohibit sports contracts on prediction-market venues. A central issue is whether current federal law already gives regulators sufficient authority. The Commodity Futures Trading Commission's role is expected to be a key focus, as regulators and state authorities have questioned whether these contracts operate as financial products or functionally mirror sports wagering. The uncertainty has increased pressure on Congress to clarify the governing framework. Gaming-industry representatives are expected to argue that sports contracts closely resemble traditional sports betting and compete with state-regulated gaming markets. They are seeking tighter limits on platforms offering these products. Attorney Daniel Wallach, who outlined anticipated testimony ahead of the hearing, said several witnesses contend the CFTC already has adequate oversight power and that Congress does not need to pass additional legislation. One witness, Robert Schwartz, is expected to argue that existing rules provide strong enforcement tools, including the CFTC's ability to reject contracts that conflict with public policy. Legal scrutiny is also rising outside Capitol Hill. France recently blocked access to Polymarket after finding the platform promoted illegal gambling services, adding international momentum to the regulatory debate. In the U.S., Kalshi's sports-related contracts have faced a notable legal setback. Judge Analisa Torres ruled that New York gambling laws apply to Kalshi's sports event contracts, challenging the view that federal commodities regulation alone controls these markets. Wallach also pointed to the Dodd-Frank Act, arguing it allows regulators to prohibit event contracts involving gaming when public-interest concerns are implicated'an interpretation likely to feature in the hearing. David Bean, chairman of the Indian Gaming Association, is expected to warn that sports prediction contracts are effectively conventional sports gambling wrapped in a financial-market structure. Both the American and Indian gaming associations continue to push for a full ban on sports contracts, arguing prediction-market platforms circumvent regulatory regimes applied to traditional sportsbook operators and should be held to equivalent standards. The hearing comes as prediction markets expand rapidly across the U.S., with platforms including Polymarket and Kalshi broadening beyond politics into sports and other real-world events. That growth has drawn greater scrutiny from regulators, lawmakers, courts, and gaming groups. Tomorrow's session is set to center on oversight, customer safeguards, market integrity, and the legal boundaries governing sports prediction markets'and could shape future regulatory priorities for sports event contracts.