AGA renews push to curb online prediction markets

The American Gaming Association last week relaunched a public campaign urging federal and state regulators to restrict online prediction markets that let users wager on elections, economic indicators and other events. The trade group said these platforms pose risks to consumers and to the integrity of regulated gambling.

The AGA told policymakers that many prediction markets operate outside the protections that apply to licensed sportsbooks and casinos. The group said the rapid growth of event contracts has outpaced existing rules and that consumers can face manipulation, weak consumer safeguards and unclear dispute-resolution processes. The AGA asked for clearer federal guidance and for restrictions where platforms compete directly with state-regulated gaming markets.

The issue has split the U.S. gaming industry. Traditional casino companies and their trade organizations are seeking regulatory clarity and stronger consumer protections. A mix of startup platforms, crypto-native markets and some online operators are pressing for lighter oversight and the ability to offer event-based trading. Proponents told lawmakers that some markets provide information and hedging tools and can operate with on-chain records or exchange-style models.

Regulatory and legislative reviews are under way in several states, with officials assessing whether existing gaming laws cover prediction contracts. At the federal level, agencies and lawmakers are considering which regulators have jurisdiction and whether new statute is needed. Lawmakers and regulators have received letters and reports from both sides; proponents warned that restrictive rules could push activity offshore or into decentralized platforms that are harder to police.

Debate over permissible event types has been part of the dispute. Critics highlighted platforms that list political outcomes and public-health scenarios as especially sensitive because of potential impacts on civic processes and public trust. Supporters argued that limiting certain event categories would be more targeted than broad prohibitions and pointed to technical safeguards such as transparency reports, market circuit breakers and identity verification.

Industry observers point to the recent expansion of legal sports betting and online casinos under state-by-state legalization, which has produced a larger regulated market and state tax revenue. At the same time, fintech and crypto firms have introduced new ways to trade event-linked contracts, creating questions about how traditional gaming law applies to new platforms. Prediction markets have a history in academic and specialized trading settings, and consumer-facing platforms have broadened access.

Regulatory filings, state rulemakings and exchanges with federal agencies are ongoing. Policymakers are addressing questions of jurisdiction, permitted event types and consumer safeguards that will determine how prediction markets operate for U.S. users and whether additional limits or regulations are put in place.