AGA and IGA urge Congress to address sports event contracts

Abi Bray

13 January 2026 at 6:51am UTC-5

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The American Gaming Association and the Indian Gaming Association have written a joint letter to the US Senate and the House of Representatives addressing sports event contracts.

The letter describes sports events contracts as “indistinguishable from legal sports betting,” and comments on how, since prediction markets launched in January 2025, they have expanded to offer parlays, with potential markets being offered on college transfer portals.

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This represents a rapid growth since the original markets on outcomes of single games were introduced. The letter states that the increase occurred from the exploitation of “regulatory inaction” by the Commodity Futures Trading Commission, under which prediction markets operate.

The associations said they believe that Congress considering cryptocurrency market structure legislation is an essential step towards preventing “sports betting and casino gambling under the guise of ‘event contracts.’”

Following a controversial bet on the capture of Venezuelan President Nicolás Maduro, the two trade associations are advocating for Congress to prevent the contracts from being offered.

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While Chairman of the Commodity Futures Trading Commission, Michael Selig, said in his confirmation hearing that the commission would not rein in sports event contracts under his leadership, he did add that if Congress were to step in, the Commission would follow.

Both associations are now urging Congress to step in and introduce legislation on cryptocurrency market structures, as well as to reinforce gambling laws to prevent gaming from being offered through the Commodity Futures Trading Commission.

Abi Bray brings strong researching skills to the forefront of all of her writing, whether it’s the newest slots, industry trends or the ever changing legislation across the U.S, Asia and Australia, she maintains a keen eye for detail and a passion for reporting.

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The Backstory

Why the trade groups are escalating now

The American Gaming Association and the Indian Gaming Association moved in tandem after a year in which prediction markets encroached on sports wagering with speed and scale. Since January, platforms have rolled out parlay-style offerings and eyed college transfer portals, blurring a line that state and tribal regulators argue was settled by post-PASPA frameworks. The tipping point came as event contracts tied to sporting outcomes spread under the Commodity Futures Trading Commission’s umbrella, and a controversial market on the capture of Venezuela’s Nicolás Maduro spotlighted how far the products can drift from traditional hedging. The trade groups’ joint appeal to Congress is a bid to force federal clarity on what constitutes gambling versus a financial instrument and to close off what they call a regulatory loophole.

That urgency follows a string of state actions and legal clashes testing jurisdiction. Operators and exchanges insist event contracts are federally supervised futures, not bets. Gaming regulators say sports outcomes fall squarely within state betting laws and tribal compacts. The result is a patchwork of enforcement and litigation that has left consumers, licensed sportsbooks and tribes navigating overlapping regimes.

A regulatory turf fight comes to a head

The battle line is sharpest in New York. Prediction market Kalshi sued the New York State Gaming Commission, arguing the CFTC has exclusive authority over its platform and that state intervention is an improper gambling crackdown on financial products. In its complaint, Kalshi frames its sports-related offerings as event-based futures, not wagers, and casts New York’s stance as an intrusion into federal oversight. The company’s move follows confrontations in other states and comes on the heels of efforts to blur the finance-gaming boundary, an issue that has surfaced for consumer trading apps as well. Read more in Kalshi sues New York regulators over event contracts rules.

The case underscores a key pressure point: if platforms can position sports outcomes as federally regulated derivatives, they can bypass state licensing, taxation and responsible gaming obligations. If states prevail, prediction markets offering sports event contracts would need to comply with the full sports betting architecture or exit those markets. The legal outcome could define which regulator sets the rules for a fast-growing category and who bears responsibility for consumer protection.

States entrench their authority

Nevada staked out an early and explicit position. The Nevada Gaming Control Board told licensees that sports event contracts are wagers under state law, regardless of whether they are listed on a CFTC-regulated exchange. The notice warned that prediction markets operating in the state must hold a nonrestricted license with sports pool approval and follow existing rules for accounts, systems and integrity monitoring. The Board also cautioned that partnering with unauthorized firms elsewhere could jeopardize a company’s suitability. See coverage in Nevada Gaming Control Board warns licensees that sports event contracts are wagers and the underlying Notice 2025-77.

Michigan followed with a warning shot to Washington. The Michigan Gaming Control Board urged the CFTC to scrutinize whether sports event contracts serve the public interest, arguing they amount to internet sports betting and must comply with the state’s Lawful Sports Betting Act. The regulator cited consumer risk, responsible gaming standards and the potential erosion of tax revenue that supports public services as reasons for federal restraint. Details are in Michigan regulator registers concern over event contracts with CFTC.

Pennsylvania officials have also pressed for clarity, signaling that more states may move to defend their betting regimes. The message is consistent: event contracts tied to sports belong within state-licensed sportsbooks, not on financial exchanges.

The CFTC’s stance and a wait-it-out approach

The federal posture remains unsettled. During his confirmation process, CFTC nominee Michael Selig told senators he would not act unilaterally to rein in sports event contracts and would respect court decisions as disputes proceed. That stance alarms gaming stakeholders who see a regulatory vacuum. AGA chief Bill Miller said the hearing left core questions unanswered and vowed to defend state and tribal sovereignty while pressing Congress to ensure the CFTC prevents gambling disguised as financial products. The debate and industry pushback are outlined in AGA defends states’ right to regulate sports betting in light of CFTC nominations hearing.

The Senate Agriculture Committee advanced Selig’s nomination, but the agency’s interpretation of its authority over sports-tied contracts is likely to remain cloudy until courts or Congress weigh in. For now, the absence of federal guardrails has invited more aggressive product launches and partnerships from prediction markets, even as states warn they will treat such activity as illegal wagering.

Product expansion tests the boundary

Kalshi began listing sports event contracts on Jan. 23 after submitting paperwork to the CFTC for major events like the Super Bowl. The format — simple yes-or-no contracts on titles and outcomes — resembles sportsbook futures, and recent additions such as parlays push further into betting territory. The move follows the company’s high-profile success in securing approval for election-related markets that drew attention for accuracy in 2024. Read more in Prediction market Kalshi launches event contracts on sports.

Industry lines blurred further when Kalshi and Polymarket signed a multi-year data and rights partnership with the NHL, which confers a sheen of legitimacy to platforms still contesting their regulatory status. Meanwhile, Crypto.com introduced Super Bowl markets and refused a CFTC request to pull them pending review, highlighting the enforcement challenge when crypto-native firms resist federal direction.

The cumulative effect is a market moving faster than oversight. As offerings expand to collegiate personnel moves and headline-driven propositions, the friction with state laws intensifies and exposure grows for consumers who may not receive sportsbook-level protections or dispute resolution.

What’s at stake for operators, tribes and consumers

For licensed sportsbooks and tribal casinos, the rise of sports event contracts threatens to siphon handle without the burdens of licensing, compliance and taxation. That dynamic could reduce state and tribal revenue, distort competition and complicate integrity monitoring across leagues and data providers. Michigan’s 2024 tax haul from legal sports betting — more than $20 million — illustrates what’s on the line if volumes migrate to federally supervised venues without similar contributions.

For tribes, the issue reaches beyond revenue to sovereignty. Many compacts and state frameworks enshrine exclusive or shared rights to offer sports wagering. If derivatives exchanges can sell sports outcomes nationwide without state consent, those bargained rights weaken and enforcement becomes murkier. That helps explain why the AGA and IGA are united in urging Congress to define market structure rules that prevent event contracts from functioning as de facto bets.

For consumers, the distinction matters in practical terms. State-licensed sportsbooks must adhere to know-your-customer checks, fund segregation, responsible gaming tools and advertising standards. Financial exchanges may not provide the same recourse if disputes arise, and the marketing of event contracts as investment products can obscure risks. As litigation advances and Congress weighs cryptocurrency market structure, the central question is whether federal policy will recognize sports-tied event contracts as gambling and channel them into established frameworks — or let a parallel market grow under financial regulation with fewer protections.

That decision will shape how fast the sector evolves, who regulates it and where the profits land. The trade groups’ call for congressional action is an attempt to force that choice now rather than after the market outpaces the referees.