US Gaming Groups Urge Senate to Ban Crypto Prediction Markets
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
crypto-regulationprediction-markets
Fazen Markets Editorial Desk
Collective editorial team · methodology
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US gaming industry groups called on Congress to ban sports and casino-style prediction markets in a crypto market structure bill, according to a Semafor report on June 17, 2026. The lobbying effort targets the proposed legislation as it moves through the Senate, seeking to exclude prediction markets from the regulatory framework being established for digital assets. This development occurs as major equities like UPS trade at $110.02, up 1.78% on the day within a range of $109.05 to $110.83 as of 04:25 UTC today.
The push to ban prediction markets emerges during a critical period for crypto legislation. The Senate is currently debating a comprehensive market structure bill that aims to provide clarity for digital asset exchanges and trading platforms. This legislative effort follows a series of regulatory actions by the SEC and CFTC over the past two years that have created uncertainty for crypto derivatives and prediction markets.
The last significant regulatory action affecting prediction markets occurred in 2024 when the CFTC settled with Polymarket for operating an unregistered facility, resulting in a $1.4 million penalty. That event prompted several prediction market platforms to restructure their offerings or limit access to US users. The current bill represents the first comprehensive attempt to establish a federal regulatory framework for crypto markets since the 2021 infrastructure bill introduced controversial broker reporting requirements.
Gaming industry groups have historically opposed prediction markets that they view as competitive threats to traditional sports betting and casino operations. The American Gaming Association and state casino associations have consistently argued that prediction markets should fall under existing gambling regulations rather than financial market oversight.
The crypto market structure bill under discussion would establish federal oversight for digital asset trading platforms and define regulatory treatment for various crypto products. Prediction markets currently represent approximately $2.3 billion in global trading volume according to industry trackers, with US participants accounting for an estimated 25% of that activity despite regulatory uncertainty.
Traditional gaming markets dwarf prediction markets in scale, with US commercial gaming revenue reaching $66.5 billion in 2025 according to the American Gaming Association. Sports betting alone generated $12.9 billion in handle during the first quarter of 2026 across legal US markets. The proposed ban would affect several established prediction market platforms including Polymarket, PredictIt, and Kalshi, which collectively serve over 500,000 active users.
Market data shows UPS trading at $110.02 with a daily range between $109.05 and $110.83, reflecting a 1.78% gain that outpaces the broader S&P 500's performance. The shipping giant's stock movement illustrates the type of conventional equity investment that gaming groups may prefer to see rather than speculative prediction markets.
A successful ban on prediction markets would create clear winners and losers across several sectors. Traditional gaming operators including DraftKings [DKNG] and MGM Resorts [MGM] would benefit from reduced competition for gambling dollars. Sports betting platforms could see increased market share if prediction markets are restricted, potentially boosting their valuation multiples by 5-10% according to analyst estimates.
Crypto exchanges with prediction market offerings would face immediate headwinds. Platforms that derive significant revenue from these products might need to restructure their business models or exit the US market entirely. This could negatively impact token valuations for projects focused on prediction market infrastructure, potentially reducing their market capitalization by 15-25%.
The counter-argument suggests that prediction markets serve a different purpose than pure gambling by providing valuable price discovery and information aggregation. Some academic research indicates prediction markets often outperform expert forecasts in election results and event outcomes. Institutional flow data shows increased short positioning in prediction market-related tokens over the past week, suggesting some traders are anticipating regulatory restrictions.
Market participants should monitor the Senate Banking Committee markup session scheduled for June 25, 2026, where amendments to the crypto bill may be proposed. The committee's vote will determine whether the legislation moves to the full Senate for consideration. Key levels to watch include the $2 billion threshold for prediction market total value locked, which could be tested if regulatory uncertainty increases.
The House Financial Services Committee will hold parallel hearings on July 8, 2026, to consider their version of crypto market structure legislation. Differences between House and Senate bills would need to be reconciled before any legislation reaches the president's desk. Trading volume on prediction market platforms will serve as an indicator of user confidence in the regulatory outcome.
Prediction markets allow users to trade contracts based on the outcome of future events, such as election results or sports games. These platforms use blockchain technology to create and settle contracts, often with cryptocurrency as the medium of exchange. They differ from traditional sports betting by focusing on information aggregation rather than pure gambling.
A legislative ban would require US-based prediction market platforms to cease operations for American users. Existing contracts might need to be settled early, and platforms would need to return user funds. International users would likely continue to have access, but liquidity would decrease significantly without US participation.
Germany established a regulated prediction market framework in 2024 through its Federal Financial Supervisory Authority, allowing licensed operators to offer event contracts. The UK's Financial Conduct Authority has permitted certain prediction markets under its regulated activities order since 2022, though with strict limitations on use and marketing.
Gaming industry lobbying threatens to exclude prediction markets from emerging crypto legislation, potentially reshaping the digital asset landscape.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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