A House subcommittee held its first hearing on sports event contract regulation, months after more than a dozen bills targeting the multibillion-dollar prediction market industry were introduced.
Trading volumes are substantial. During the 2026 FIFA World Cup, sports event contracts exceeded $50bn in activity. Representatives from the American Gaming Association and Indian Gaming Association told lawmakers that states and tribal nations are losing millions to prediction markets, which they consider illegal gambling.
The Commodity Futures Trading Commission is defending federal jurisdiction over the derivatives. Chair Michael Selig has repeatedly stated the agency holds authority to regulate sports event contracts, and in March the CFTC published draft rules citing a public-interest test more than 500 times.
Indian Gaming Association chair David Bean pointed out the CFTC is critically understaffed, with only Selig confirmed out of five commissioner seats. Bean urged Congress to pass HR 7840, which would prohibit federally regulated exchanges from offering sports event contracts.
Carl Kennedy, a former CFTC attorney, argued against an outright ban. He drew a parallel with gold: a dealer sells it under state law, CFTC-regulated exchanges offer futures, and the SEC oversees ETFs. States would keep control over sportsbooks while federal exchanges remain under CFTC oversight.
Most market participants expect the dispute to reach the Supreme Court. New Jersey may file a petition to review the ruling in favour of platform Kalshi. Subcommittee chair Dusty Johnson said further hearings will follow.
