Senate Hearing on Prediction Markets Set for May 20 — What Sports Bettors Need to Know

A Senate Commerce subcommittee is set to hold its first formal hearing on prediction markets this Wednesday, May 20, in a development that could determine whether platforms like Kalshi and Polymarket are allowed to continue offering sports event contracts to American users. Senator Marsha Blackburn’s Subcommittee on Consumer Protection, Technology and Data Privacy will hear testimony on competing pieces of legislation, with the American Gaming Association and Indian Gaming Association lobbying aggressively for restrictions ahead of the session.

The hearing arrives as the broader political and legal landscape around prediction markets is shifting rapidly. The Senate Banking Committee advanced the Digital Asset Market CLARITY Act in a 15-9 vote on May 14, but the bill’s path to becoming law remains uncertain given the 60-vote threshold needed to overcome a filibuster. At the same time, the CFTC has been suing states that have tried to apply their gambling laws to prediction market platforms, asserting exclusive federal jurisdiction — a claim that the Ninth Circuit Court of Appeals is expected to rule on in the coming weeks.

The Bills on the Table

Two competing legislative frameworks are expected to dominate Wednesday’s hearing. The Prediction Markets Are Gambling Act would ban live-event wagering on prediction platforms entirely, drawing a hard line against contracts tied to the outcome of sporting events. Kalshi, Polymarket, and Robinhood have all lobbied against this approach, arguing that event contracts are derivatives products that fall under CFTC jurisdiction rather than state gambling law.

The alternative is the Prediction Markets Security and Integrity Act of 2026, which takes a lighter regulatory approach by requiring prediction market platforms to register with the CFTC and comply with anti-money-laundering and consumer protection standards already imposed on licensed sportsbooks. The AGA has publicly endorsed this framework as a fairer competitive baseline, even as it continues to push for explicit language in the CLARITY Act barring sports betting and casino-style games from CFTC-registered exchanges.

The AGA and IGA jointly sent a letter to Congress on May 16 urging legislators to include that language in whatever crypto market structure legislation moves forward. The letter argued that the current system allows prediction markets to offer what is functionally nationwide sports betting without paying state gaming taxes, complying with problem gambling mandates, or obtaining licenses that cost operators tens of millions of dollars in markets like New York and Pennsylvania. Sports bettors in Pennsylvania and other regulated states currently access licensed sportsbooks subject to those exact requirements.

What Happens Next

A coalition of 41 state attorneys general has added its voice to the push for federal clarity, writing to Congress to demand action before the courts force the issue. The AGA spent $730,000 lobbying on prediction markets in the first quarter of 2026 alone, its largest single-quarter expenditure on the issue in over a year, reflecting how central the regulatory fight has become to the established gambling industry.

For sports bettors, the outcome of Wednesday’s hearing and any subsequent legislation could have meaningful practical consequences. If a ban on live-event contracts passes, users of DraftKings Predictions, FanDuel Predicts, and standalone platforms like Kalshi would lose access to sports event markets entirely. Under the registration framework, those products could continue but would be subject to age verification, spending limit tools, and other consumer protections currently required of licensed sportsbooks. Congress breaks for Memorial Day recess on May 21, meaning any legislative action would need to wait until after the holiday, though the White House has set a target of a July 4 signing for the broader CLARITY Act.