Congress to Hold Sports Prediction Markets Hearing Amid Push to Ban Sports Contracts

The U.S. House Committee on Agriculture has set a hearing on sports prediction markets amid increased scrutiny on platforms such as Polymarket and Kalshi. Witnesses at the proposed hearing will include stakeholders from gaming associations, which are pushing for a ban on sports contracts on these platforms.

House Agriculture Committee To Hold Sports Prediction Markets Hearing

According to a release, the Subcommittee on Commodity Markets, Digital Assets, and Rural Development under the House Agriculture Committee will hold a hearing on sports prediction markets tomorrow. The hearing will seek to examine customer protections and market integrity in these markets.

Witnesses include legal experts and executives from the American and Indian gaming associations. This hearing comes as platforms such as Polymarket and Kalshi face a crackdown from state regulators over claims that they are operating as unlicensed sports betting platforms.

As CoinGape reported, France’s gaming regulator blocked access to Polymarket, accusing the platform of promoting illegal gambling services. The regulator also highlighted how this was a criminal offense which carried a fine.

Prediction markets also secured a major loss recently as the Ripple-linked Judge Analisa Torres ruled that New York state gambling laws apply to Kalshi’s sports-related event contracts. This signaled that platforms such as Kalshi and Polymarket may not solely be under the CFTC’s jurisdictional purview.

Testimonies Of The Witnesses

Legal expert Daniel Wallach highlighted the testimonies of the witnesses that are to appear at tomorrow’s sport prediction markets hearing. He noted that those pro prediction market witnesses are urging Congress not to pass clarifying legislation, as they insist that the CFTC already has the authority to regulate top crypto prediction market platforms such as Polymarket.

One of these witnesses, Robert Schwartz, said that the CFTC already has the tools it needs to implement the policy it selects. “It has powerful authority to disallow exchanges from listing problematic contracts,” he said.

The legal expert also alluded to the Dodd-Frank Act, which he argued has authorized the agency to outrightly prohibit an exchange from listing a contract that involves ‘gaming’ if that contract violates the public interest. Meanwhile, the American and Indian gaming associations are seeking a ban on sports contracts on these prediction markets.

David Bean, Chairman, Indian Gaming Association, argued that platforms such as Kalshi were simply circumventing the law, as what they offer is a mirror to traditional sports gambling. Bean also said that the CFTC’s proposed rule attempts to convert federally regulated derivatives exchanges into nationwide online gambling platforms.