Senators Grill Prediction Market Operators
Mike Goodpaster Published 21/05/2026
A bipartisan group of Senators came at the operators of prediction market and sports betting sites with full force on Wednesday. Questions were raised about advertising and marketing strategies, consumer safety protection measures, and monitoring the integrity of wagering were addressed during a sometimes combative hearing.
The Senate Commerce, Science, and Transportation Committee hearing addressed such issues as recent betting scandals involving match-fixing in the NBA and MLB, and concerns about insider trading among government officials in prediction market outcomes. Especially worrisome to the Senators was the impact that increased betting opportunities are having on young people in the USA.
Senators place prediction markets under increased scrutiny
Marsha Blackburn, a Republican from Tennessee, is the chair of the Senate Commerce, Science, and Transportation Committee. She expressed concern that prediction market sites are using legal loopholes to skirt regulatory rules that sportsbooks must adhere to diligently. Like many who work in the sports betting industry, Blackburn admits she struggles to differentiate between sports betting and the sports-event contracts offered by prediction market sites.
“The introduction of sports event contracts on prediction markets has exposed more people to sports betting," Blackburn said in a statement. "While prediction markets represent financial innovation across sectors, there are real concerns that they function much like traditional sports betting without the enforcement of state regulators and attorneys general.”
Online and retail sportsbooks in the U.S. market answer to state regulators. Prediction markets are under the regulatory control of the federal Commodities Futures Trading Commission (CFTC).
Senator Jacky Rosen, a Democrat from Nevada, agreed with the commonly held perception that sports event contracts are escaping the same regulatory control that is required for sports betting.
“A rose by any other name still smells as sweet,” Rosen said, according to reporting by The Hill. “What is the risk in allowing prediction markets to circumvent meaningful mandatory consumer protections? They’re just trying to get around the rules.”
Prediction markets are seeking to differentiate their product from sports betting
Patrick McHenry, once a Republican serving in the House of Representatives, is today advocating for the Coalition for Prediction Markets. Speaking as a witness at the hearings, he sought to spell out why sports event contracts are different than sports wagering.
“Conflating the two does little to advance our shared goal of consumer protection,” McHenry said. “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.”
McHenry also disputed the notion that prediction market sites are skirting the rules. He insisted that the regulatory control of the CFTC is quite stringent.
“To say there’s no federal standard in this realm is not true,” McHenry said. “The rulemaking regime that is ongoing at the CFTC is very important to get it right so we do have the best consumer protection available and possible.”
Anti-gambling advocates insist young people are more at risk than ever before
People who help problem gamblers also gave testimony on Wednesday. They believe the rising popularity and massive presence of prediction markets are problematic. It's putting young people at greater risk of gambling addiction.
“There is an unregulated avalanche of advertising for these products on social media; 18-year-olds are being told this is an investment,” said Harry Levant, director of gambling policy at the Public Health Advocacy Institute. “There’s a huge need for federal oversight because of what’s happening."