Senate

Lawmakers scrutinize sportsbooks, prediction markets at testy hearing

Comments:

by Dominick Mastrangelo - 05/20/26 3:15 PM ET

Comments:

Link copied

by Dominick Mastrangelo - 05/20/26 3:15 PM ET

Comments:

Link copied

NOW PLAYING

Senators from both parties peppered officials from the gaming and prediction market industries with questions about their aggressive marketing strategies, integrity-monitoring practices and efforts to protect consumer safety during a sometimes testy hearing on Wednesday.

The Senate Commerce, Science and Transportation Committee’s hearing took place amid rising worries about betting scandals, and the possibility that people have been using insider information from government work to cash in on unregulated prediction markets.

“Fans need to be assured that game rigging is rare, and that anyone caught doing it will be punished harshly if not banned forever,” said Sen. Ted Cruz (R-Texas), who serves as chair of the committee.

“This has all been inflamed by the rapid explosion of legal sports betting across the United States. What was once limited to a handful of locations is now available in almost every corner of the country — often right on a cellphone,” said Sen. Marsha Blackburn (R-Tenn.).

“The introduction of sports event contracts on prediction markets has exposed more people to sports betting,” Blackburn added. “There are real concerns that they function much like traditional sports betting without the enforcement of state regulators and attorneys general.”

A large portion of Wednesday’s hearing focused on the inherent difference between sports gambling and prediction markets, with multiple members of the panel asserting most Americans either don’t understand or see much difference between the two.

Bill Miller, president and CEO of the American Gaming Association, assured lawmakers that the major casinos and sportsbooks his organization represents, such as FanDuel, DraftKings and BetMGM, have doubled down on integrity monitoring and partnerships with law enforcement. He also defended the marketing tactics of several sportsbooks from skeptical lawmakers who railed against the targeting of young people on social media.

When Blackburn asked Miller directly if his organization’s members advertise to children, he replied, “We do not.”

“I think the algorithms that are built around,” he said, before Blackburn cut him off and said “they don’t build their algorithms and they don’t open them.”

Miller noted the dangers of unregulated and offshore markets, which unlike sportsbooks allow customers to bet on events outside of sports, including politics, entertainment and pop culture.

“Conflating the two does little to advance our shared goal of consumer protection,” said former Rep. Patrick McHenry (R-N.C.), a witness at Wednesday’s hearing and an adviser for the Coalition for Prediction Markets. “In a casino or sportsbook, the house sets the odds and profits when customers lose. In a prediction market exchange, participants trade with one another, while the platform earns transaction fees for facilitating the market. As a result, the incentives are fundamentally different.”

Dr. Harry Levant, director of gambling policy at the Public Health Advocacy Institute, pleaded with lawmakers to intervene in what he described as American gambling culture run amok.

The prevalence of gambling culture on college campuses and social media can make young athletes more susceptible to bribes and potential corruption, some gaming industry observers have suggested in recent months.

“There is an unregulated avalanche of advertising for these products on social media; 18-year-olds are being told this is an investment,” Levant told the panel. “There’s a huge need for federal oversight because of what’s happening with the children, and it’s significantly worse now with prediction markets.”

Some lawmakers seemed more skeptical of unregulated prediction markets than the marketing strategies of legal sportsbooks, several of which spent at least $1 million on lobbying last year alone.

“A rose by any other name still smells as sweet,” quipped Sen. Jacky Rosen (D-Nev.). “What is the risk in allowing prediction markets to circumvent meaningful mandatory consumer protections? They’re just trying to get around the rules.”

McHenry insisted prediction markets are working closely with President Trump’s Commodities Futures Trading Commission (CFTC).

“To say there’s no federal standard in this realm is not true,” he said. “What they’re doing is using new technology to access a very old type of exchange of a swaps market. It has been around for 100 years. … And the rulemaking regime that is ongoing at the CFTC is very important to ge