The chair of the Indian Gaming Association and a senior executive of the American Gaming Association told a congressional panel Tuesday that prediction markets are a threat to the legal gaming industry, with more than $1.2 billion in lost tax revenue to date.
IGA Chair David Bean and Christopher Cylke, senior vice president of government relationship for the AGA, appeared at a hearing before the House Agriculture Subcommittee on “Examining Customer Protections and Market Integrity in Sports Event Prediction Markets.” The hearing lasted two hours.
Most of the comments that came from members of the House committee focused on ways to improve the oversight and regulation of the Commodity Futures Trading, from which prediction market operators derive their authority. Most of the questions were directed to witnesses who testified on behalf of allowing prediction markets with better oversight of the CFTC and increased staffing.
In a five-minute opening statement, Bean said Indian Country supports responsible innovation and the use of futures to hedge risk and ensure fair pricing, but it’s opposed to sports betting on prediction markets, which he said has “manipulated a weak regulatory agency to offer nationwide online sports gambling to kids as young as 18.”
Tribal governments starting in the 1970s turned to gaming to fund services for its citizens. Every dollar goes to fund health care, education, housing, public safety and infrastructure, Bean said. It also generates jobs and in 2025, it accounted for over 682,000 and a path to the middle class for tribal citizens and non-members alike, especially in areas where jobs don’t exist.
Bean said tribes have worked under the framework of the Indian Gaming Regulatory Act for nearly four decades and have negotiated agreements with states to regulate gambling. Tribes have strict age requirements and invest in problem gambling programs that include treatment, education, self-exclusion, and training.
“Prediction markets threaten these rural jobs and revenue generated for tribal and state budgets by violating our laws and regulations,” Bean said. “They claim they are innovators, yet they have invented nothing. Prediction market apps offer bets identical to those of legal regulated sportsbooks – money lines, totals, parlays, and props. The only difference is that prediction markets avoid regulatory systems designed to protect consumers and the integrity of American sports.”
Bean said prediction markets ignore the strict age requirements and problem gambling and have targeted young people and those in jurisdictions where sports betting is prohibited.
“They advertise on TikTok and hire influencers without revealing the true risks of gambling,” Bean said. “In fact, one CEO attempted to equate sports contracts to financial literacy. This is both misleading and dangerous. Today, thanks to a one-person agency, every teenager with a smart phone can now lose their shirt without leaving their house or dorm room. We are starting to see the devastating impact on our kids’ mental health and financial security. No one voted for this. Congress has not passed any new laws on this matter. This is happening because one person has declared online sports gambling is legal in every state and on every reservation. One man has taken the CTFC from crops to props.”
Bean said they are joined in the fight by the AGA and union workers throughout the U.S. More than 40 state attorneys general have filed legal briefs and comments to the CFTC.
“They are fighting to enforce laws of their states and your states,” Bean said. “Some of those laws prohibit all forms of gambling. Some prohibit online gambling and some rely on revenue from gambling to support their communities.”
Bean urged Congress to advance a House bill to prohibit prediction market operators from offering sports wagering. He also noted that the Clarity Act under consideration for dealing with cryptocurrency doesn’t provide a back door to prediction market legalization and instead allows state and tribal gaming laws to have their full force. He also urged them to stop the CFTC proposed rules overseeing gambling.
Cylke said sports betting on prediction markets with operators like Kalshi and Polymarket “makes mockery of Congressional intent.” It strips the public of important consumer protections and costs communities “a fortune” in lost tax revenue.
The legislative history dealing with the CFTC confirms that Congress didn’t want sports betting to be conducted on derivative markets, Cylke said.
Litigation has reached nine federal appeals courts and lawmakers across the country are responding to what Cylke called backdoor sportsbooks.
“The AGA supports responsible financial innovation, but what prediction markets are doing with sports wagering is not innovative,” Cylke said. “Prediction market platforms are using the CFTC to offer nationwide sports betting, while bypassing the state and tribal gaming laws that Congress, states, tribes, regulators, and voters have spent decades building. That matters, because the legal gaming industry is an important part of the American economy. It supports 1.8 million American jobs, contributes approximately $329 billion to the American economy, and produces roughly $53 billion in federal, state, and local tax revenue each year. Those benefits exist because gaming is licensed, taxed, monitored, and accountable. Prediction markets thumb their noses at that framework and make sports betting available nationwide.”
Cylke estimated states and tribes have already lost more $1.2 billion in gaming tax revenue since these platforms began offering sports event contracts. “This sum is snowballing by the day, and that money should be supporting education, infrastructure, public safety, responsible gaming programs, and tribal communities.”
Cylke said the consumer protection gaps are just as serious, while and sportsbooks are built around age verification, geofencing, responsible gaming tools, suspicious activity reporting, and regulatory oversight.
“Prediction market sports betting is not subject to comparable gaming requirements,” Cylke said. “These products can reach users as young as 18, even though nearly all legal sports betting in this country is limited to adults 21 and older.”
Cylke said their marketing paints the picture of sports “trading” as a financial strategy rather than entertainment with a risk of loss. It also threatens sports integrity, since licensed operators monitor wagering patterns and report suspicious activity.
“If sports betting migrates to platforms outside those gaming-specific, the risk is that suspicious activity goes undetected, consumers are confused, and confidence in the games is weakened,” Cylke said.
The CFTC has an important mission overseeing communities, derivatives, and emerging digital asset markets, but it was not created to regulate gambling, police responsible gaming, and referee sports integrity or become America’s national sports betting regulatory, Cylke said.
Cylke called on Congress to ensure gambling policy falls to states and tribes consistent with existing federal laws and that CFTC entities should not be allowed to offer nationwide sports betting or casino-style gambling.
Bean was asked by a committee member about a report out Tuesday that tribal gaming saw a 5.3% increase in revenue in 2025 and whether that means that tribes are still thriving despite the prediction markets. He responded that while revenue went up overall, many tribes are experiencing losses. “The increase is nowhere near the explosive increase we have seen in prediction markets in the last 18 months.”
