Congress hits a wall on reining in sports betting, prediction markets  

Lawmakers appear to have stalled out on a months-long effort to pass legislation imposing new rules on the booming business of sports gambling and prediction markets, despite bipartisan agreement the industries have gone underscrutinized by the federal government for too long.  

Critics in both chambers say major online sportsbooks like FanDuel and DraftKings are not doing enough to limit opportunities for corruption and game rigging, while they reap big profits from millions of Americans, a growing number of whom are struggling with gambling addictions.

Prediction markets, similarly, are growing in popularity and usage across the U.S., offering customers more opportunities to wager on outcomes well outside the realm of sports that touch on politics and the economy.

In recent months, several scandals have popped up involving people who work in some capacity for the government and have cashed in on knowledge of sensitive information by using prediction markets, which unlike traditional sportsbooks offer “event contracts” on news, business and pop culture happenings.  

This has all taken place against the backdrop of a lobbying and public relations war between the legalized gambling industry and relatively new prediction market sector in statehouses across the country and in the halls of Capitol Hill.  

Both sides are looking to stave off stricter regulation from the federal government, while experts and observers warn inaction on the part of Congress is likely to allow gambling’s already deeply embedded place in the American sports and political culture to strengthen.   

“These prediction markets have almost gotten to be like insider trading, which makes me nervous,” Sen. Tim Kaine (D-Va.) told The Hill this week. “And with respect to sports, betting is a sad reality, that probably we cannot change, and is just draining money out of people’s pockets, especially young males in ways that is pretty destructive.”  

Congress’s most recent pitch to rein in the business of sports gambling, the SAFE Bet Act, has gained little traction in the Senate.  

That bill would set a minimum federal standard to curb predatory practices in the online sports betting industry and implement safeguards for consumers, particularly young people. 

Lawmakers are expressing frustration the bill failed to get to the floor this summer, even as more instances of gambling-related corruption in sports leagues have popped up.  

“For one, these issues are relatively recent. But second, these” gambling and prediction market companies “are throwing their weight around here,” Sen. Richard Blumenthal (D-Conn.), one of the co-sponsors of the bill, told The Hill. “They’re using their resources, lobbying, lawyers and money to try and stop us.”  

Sports gambling remains heavily regulated on a state-by-state basis, but questions are intensifying about the partnerships........

© The Hill