Below is a joint letter from the American Gaming Association and Indian Gaming Association on addressing unregulated sports event contracts in upcoming cryptocurrency market structure legislation.

Dear Members of the United States Senate and House of Representatives,

On behalf of the American Gaming Association (AGA) and the Indian Gaming Association (IGA), we write to urge timely congressional action to address the explosion of unregulated sports event contracts being offered by prediction markets. Since these contracts, that are indistinguishable from legal sports betting, were launched last January, they have grown exponentially in trading volume and have expanded beyond the outcome of single games to include complex parlays and even potential wagers on the collegiate transfer portal. This growth has occurred by exploiting regulatory inaction by the Commodity Futures Trading Commission (CFTC), which undermines state law and tribal sovereignty and flies in the face of existing federal laws and regulation intended to protect consumers and the integrity of our nation’s financial markets. We firmly believe that congressional consideration of cryptocurrency market structure legislation provides an important, bipartisan opportunity to prevent sports betting and casino gambling under the guise of “event contracts.”

Together, our associations represent the legal regulated gaming industry in the United States that generates $329 billion in annual economic impact, produces $53 billion in tax revenue, and supports 1.8 million jobs. As one of the most highly regulated industries in the United States, licensed gaming operators work with more than 8,400 state and tribal regulators across the country to ensure our industry has transparency, integrity, strict consumer safeguards and responsible gaming practices. It’s a proven framework that ensures local control and protects players and the public while delivering billions of dollars in community benefits.

For decades, we have followed a uniquely American approach to gaming – an approach that has been the foundation of our success. This system gives the people a voice on whether and how to allow gaming, which creates a social contract between states, tribes and our industry: when we earn the privilege to enter your community, we deliver benefits in return.

In 2018, the Supreme Court overturned the Professional and Amateur Sports Protection Act and ruled that states have the right to determine whether to legalize sports betting. Since then, 39 states and the District of Columbia have done so, which in many jurisdictions has included close coordination with tribal authorities. Where sports betting has been legalized, states and tribes have set strict guardrails to ensure strong protections such as:

• Minimum betting ages (21+ in most jurisdictions)

• Licensing and suitability requirements for operators

• Anti-money laundering (AML) and Know Your Customer (KYC) protocols

• Mandatory responsible gaming resources, including self-exclusion programs

• Independent integrity monitoring and compliance audits

In contrast, several CFTC registered prediction market platforms have made self-certified event contracts available to anyone 18 and over, in all 50 states, circumventing state and tribal gaming laws and denying states and tribes hundreds of millions of dollars of critically needed revenue for schools, roads and first responders. The CFTC has not reviewed or approved any of these contracts as more entities enter the market, and their offerings get more audacious.

The CFTC’s own regulations – adopted pursuant to the Commodity Exchange Act (CEA) – prohibit event contracts regarding terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law. According to 39 state Attorneys General, these contracts are contrary to their state laws. They violate the Indian Gaming Regulatory Act (IGRA) that gives tribes exclusivity to offer gaming products on their land. Sports event contracts also violate the federal Wire Act that makes it illegal to offer sports wagers across state lines.

And while the gaming industry has focused our efforts on stopping unregulated sports wagering, we have seen a troubling proliferation of other concerning betting categories that seek to capitalize on tragedy, invite manipulation, and undermine public trust. Most recently, questions and concerns have been raised regarding contracts tied to the capture of Venezuelan President Nicolas Maduro and ongoing armed conflicts abroad – categories that would never be permitted under state or tribal law.

These contracts are being offered in flagrant disregard of state laws, tribal sovereignty, the Commodity Exchange Act, and CFTC regulations. They mislead consumers into believing that a sports bet is an investment, fail to protect the young and the vulnerable, open the door to money laundering, match fixing and insider trading. They rob state budgets and tribal finances while simultaneously forcing states and tribes to expend massive legal resources to defend their sovereignty.

During his confirmation hearing, Chairman Selig made it clear that the CFTC would not rein in sports betting contracts under his leadership, instead deferring to the outcome of litigation that could take years to be fully resolved. However, Mr. Selig also said that the CFTC would follow Congress if they were to step in and speak on these contracts. Therefore, it is critical that Congress act swiftly to include legislative language in the cryptocurrency market structure legislation that reenforces existing law and prohibits gaming through CFTC-registered platforms. We stand ready to work with you on this issue and appreciate your consideration.

Sincerely,

Bill Miller

President & CEO

American Gaming Association

David Z. Bean

Chairman

Indian Gaming Association