Hiding in plain sight
Prediction markets come under fire in US Senate
Game of risk: Senators criticize availability of sports events contracts.
In +More: DraftKings shuts Wrigley Field sportsbook.
Government sues Minnesota over prediction markets ban.
Senators introduce act to ban sports-betting ads aimed at minors.
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Who do you think you are?
No hiding place: A Senate subcommittee on Wednesday scrutinized the growth of sports betting and sports integrity, but senators spent most of the hearing on prediction markets, questioning whether they are, in fact, just sportsbooks.
The rise in popularity of prediction markets has prompted multiple bills in Congress aimed at tightening oversight.
Marsha, my dear: Senator Marsha Blackburn, a Republican from Tennessee and chair of the Senate Subcommittee on Consumer Protection, Technology and Data Privacy, claimed Americans are now more exposed to sports betting because of the rise of prediction markets.
She admitted during the hearing that prediction markets “represent financial innovation across many sectors.”
But the nature of sports event contracts has sparked “real concerns that they function mostly like traditional sports betting without the enforcement of state regulators, attorney generals.”
In the looper: Prediction markets drew widespread criticism during the two-hour hearing, including concern over their advertising practices, regulatory disputes and threats to national security.
Senator John Hickenlooper, a Democrat from Colorado, said in his opening remarks that prediction markets “pose the same risks to consumers as online sports betting.”
This despite its proponents claiming they are investments and not subject to state or tribal gambling laws.
“This workaround is merely a way for prediction markets to skirt state consumer protection laws,” he added.
Act of war: Concerns extended beyond sports, as lawmakers expressed concern over wagers placed on prediction markets concerning US military operations in Venezuela and Iran.
Patrick McHenry, senior advisor with The Coalition for Prediction Markets, assured lawmakers that Kalshi and other companies he represents believe contracts on war and assassination are illegal and “not in the public interest.”
Texas fold’em: The hearing marked the first time prediction markets were discussed along with regulated sports betting in a congressional hearing. Should Congress pass legislation restricting sports event contracts, users in states – such as Texas, Utah and Georgia – without legal sports betting would lose access to prediction markets.
Texas Republican Senator Ted Cruz argued that sports events contracts are “for all intent and purposes, sports bets.”
The hearing, Cruz said, was not about “rolling back legalized gambling in states that have chosen to offer it,” but to “preserve the integrity and authenticity in sports.”
Back door man: Bill Miller, president and CEO of the American Gaming Association, testified that the legal gaming industry operates under strict rules regarding age verification, AML compliance, advertising standards, integrity monitoring and flagging suspicious activity.
Prediction markets “don’t comply with most of these important regulatory protections, and they allow 18-year-old teenagers to bet on sports,” Miller said.
He also warned that the gaming integrity frameworks were being undermined by so-called prediction markets that are evading state, local and tribal authorities, costing $1bn in tax revenue.
“These so-called prediction markets are deceptively calling sports betting, financial contracts and investing,” Miller added.
“Despite messaging designed to beguile policymakers and the public, they are increasingly being exposed as back door sports-betting operations.”
Miller called for states to regulate sports event contracts, arguing that these platforms “jeopardize the integrity of sports.”
Regulatory debate: “Prediction markets, aided by a rogue Commodity Futures Trading Commission, are making a mockery of congressional intent,” Miller said. “The prediction markets are running national sportsbooks, and it’s time to hold them accountable in the same way we are.”
McHenry stressed that casinos and sportsbooks and prediction markets are fundamentally different products, and subject to different regulatory structures. “Conflating the two does little to advance our shared goal of protecting consumers,” he said.
On the beat: He also defended the Commission’s regulatory role. “The CFTC, as the cop on the beat, has the capacity to oversee this market, just as they’ve done with the broader commodities marketplace that’s been around and well versed for decades,” he told lawmakers.
It’s the first I’ve heard of it: Hickenlooper responded: “You’re the first person who’s told me you think the CFTC is up to the standards.” He noted that 90% of the trades on Kalshi and 40% on Polymarket are on sports event contracts.
Miller was blunt in his assessment of the CFTC, saying federal regulators “are absolutely not competent to handle this.”
“It was never Congress’s intent to create a federal department of gambling through the CFTC,” he said.
The hearing did not result in any new legislative proposals.
However, Blackburn said it allows lawmakers “to start to build to where we have to move in regulation and also looking at the system to what should be federal and what should be state.”
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+More
Illinois: DraftKings is shuttering its retail sportsbook at Wrigley Field at the end of May, saying recent Illinois tax increases have made the venue “difficult to justify.” The state introduced a per-wager levy in 2025 of $0.25 up to $20m in annual handle and $0.50 thereafter, after previously raising tax rates for larger online sportsbooks and retail operators to as high as 40% in 2024.
Netherlands: The Dutch Gambling Authority has warned sports-betting licensees it will take “immediate enforcement action” over any breaches identified during the World Cup. In a letter, the Kansspelautoriteit told operators that micro-betting markets such as yellow cards and corner kicks are banned, and reiterated Dutch restrictions on untargeted gambling advertising and sports sponsorship.
Chile’s land-based casino sector has reported weaker results in 2025 as the country’s illegal online gambling market continued to expand, according to the Chilean Casino and Gaming Association (ACCJ). GGR from regulated casinos fell 4.5% YoY to CLP509.8bn ($567.6m), while casino tax revenue declined 4.7%. Visitor numbers dropped 7.2%, although spend per visit rose 3.3%. The ACCJ estimated Chile’s illegal online gambling market has reached around $3.1bn and renewed calls for stronger enforcement and regulation, particularly after a Supreme Court ruling ordering internet providers to block illegal betting sites.
Iowa: Gov. Kim Reynolds has signed SF 2289 into law, giving the Iowa Racing and Gaming Commission stronger powers to pursue unlicensed gambling operators, including “illegal sweepstakes” platforms, through cease-and-desist orders and injunctive relief. The unanimously passed measure does not specifically target dual-currency models, but applies to anyone offering “games of chance, gambling, sports wagering or illegal sweepstakes” in Iowa without a license or other authorization.
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Minnesota legals
Stay up out them streets if you can’t take the heat: The Trump administration has sued Minnesota over its new prediction market ban, arguing the law is preempted by federal law and must be blocked before it takes effect on August 1.
Signed days ago by Gov. Tim Walz, the statute would make it a felony to operate or advertise a prediction market in the state, and would also reach those providing “supportive services” or data to such platforms.
In its complaint, the Department of Justice (DOJ) said: “Minnesota’s attempt to criminalize derivatives contracts is precisely what Congress sought to prevent.”
“If Minnesota’s law is permitted to go into effect, the exchanges that offer these longstanding contracts, as well as those who partner with them, can be prosecuted as felons,” the DOJ added.
It called the measure a “flagrant and unprecedented incursion into the [Commodity Futures Trading] Commission’s exclusive regulatory sphere” that should be “preliminarily and permanently enjoined.”
Malfunction! Need input! The government argues Minnesota’s law amounts to a “massive short-circuiting” of that federal regime, while the state says prediction markets are harmful gambling products that deserve intervention.
“I’m very concerned about the harms of prediction markets on Minnesotans,” said state attorney general Keith Ellison. “Prediction markets are designed to be addictive and prey especially on young people and low-income folks.”
The CFTC is waging its campaign against state efforts to regulate prediction markets, after earlier actions against Arizona, Connecticut, Illinois, New York and Wisconsin.
Children’s GAME
Much too young: Senators Richard Blumenthal and Katie Britt have introduced the Gaming Advertisement to Minors Enforcement Act, or GAME Act, which would ban sports-betting ads targeted at minors on social media platforms.
The bill would put enforcement in the hands of the Federal Trade Commission, with financial penalties for violations and repeat offenders referred to the Department of Justice, which could impose fines of up to $100,000.
The pair said the measure is aimed at the “rapid and concerning rise in youth gambling,” with Britt warning that “targeted advertising from gambling and prediction market websites can serve as the gateway to dangerous habits that too often become crippling addictions.”
Blumenthal said sportsbooks and prediction markets are “treating young people like a good rush, flooding the internet with advertisements and promotions to hook them on gambling when they’re young.”
Bloom again: The senator has already introduced separate legislation aimed at abuse and fraud in prediction markets, including age-verification requirements and a ban on advertising to underage users or people on self-exclusion lists.
It also follows the Senate’s unanimous resolution last month barring senators from trading on prediction markets, amid rising concern over insider trading.
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Euro tax
Gotta find a way: MEPs and EU budget commissioner Piotr Serafin have held talks on how a new EU-wide tax on online gambling and betting could help finance the bloc’s proposed $2trn long-term budget.
The idea was floated by budget committee member Victor Negrescu, who said the online gambling market is “one of the fastest-growing digital industries” and argued that “a significant share of these profits escapes fair taxation”.
He said an EU levy could raise between $2bn and $4bn a year, or as much as $28bn over a seven-year budget cycle.
Own it: The proposal comes as Brussels searches for new “own resources” to fund future spending priorities and repay Covid-era debt, though any new EU-wide revenue stream would still require unanimous backing from member states.
The European Gaming and Betting Association pushed back, calling the idea “fundamentally unworkable.”
It warned it would benefit illegal operators, while the European Parliament has separately floated gambling, crypto capital gains and digital services as possible additional revenue sources beyond the European Commission’s July package.
Calendar
May 26-28: Gambling & Risk Taking Conference, Las Vegas
Jun 4: Gaming in Holland, Amsterdam
Jun 10-11: Player Protection Symposium, Fort Lauderdale
Fresh off the back of our U.S. focused webinar “Beyond the Month Webinar 2026: The Future of Player Protection in the US: Trends, Innovations, and Challenges”, the Mindway AI team will be attending some key upcoming North American events.
University of Nevada-Las Vegas Gambling & Risk Taking Conference, Las Vegas, May 26-28
International Association of Gaming Advisors (IAGA) International Gaming Summit, Florida, June 2-4
SBC Summit Americas, Florida, June 9-11
We look forward to connecting with industry leaders at these events. Drop us a message to arrange a meeting contact@mindway.ai
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