U.S. Gaming Industry Seeks Congressional Action to Restrict Crypto Prediction Markets

Industry Pushes for Regulatory Barrier

The U.S. gaming industry sent a letter to Congress this week requesting that lawmakers use upcoming crypto market structure legislation to block sports and casino-style prediction markets from operating under federal derivatives rules. According to Semafor, the effort reflects concern among established gaming operators that decentralized and crypto-native prediction platforms operate with lighter regulatory oversight than traditional sportsbooks and casinos.

The Competitive Concern

Tradditional gaming companies face state-level licensing requirements, consumer protection mandates, and established tax frameworks. Prediction markets built on blockchain infrastructure or operating through crypto exchanges can reach U.S. bettors with minimal regulatory friction, creating what legacy operators view as an unlevel playing field. The industry letter argues that derivatives rules should not be used as a loophole for prediction platforms that would face stricter compliance if classified as gambling rather than trading.

Legislative Context

Congress is actively drafting comprehensive crypto market structure legislation. This lobbying push indicates that traditional gaming interests intend to shape how that legislation classifies and regulates prediction market products. The effort underscores a broader tension between decentralized and centralized financial services as Congress weighs whether crypto-native products should operate under existing financial rules or face sector-specific restrictions.

Why It Matters

For Traders

Prediction markets operating in the U.S. may face narrower operating parameters or explicit restrictions if Congress follows industry recommendations, affecting platform access and liquidity.

For Investors

Crypto-native prediction market platforms and exchanges offering such products face elevated regulatory risk; classification shifts could reshape their addressable market.

For Builders

Protocol teams designing derivatives or prediction market infrastructure should monitor congressional language to assess whether their products will be permitted under future U.S. market structure rules.