WASHINGTON, D.C. — A Senate Commerce subcommittee held a hearing in Washington on May 20, 2026, examining online sports betting and prediction markets, with lawmakers questioning representatives of sportsbook and prediction market companies about their marketing tactics and cheating allegations. The session focused on recent cheating scandals, companies' marketing tactics, and regulatory battles.

"First, in a world where sports betting exists, how do we preserve the integrity and authenticity of the sports that we love? And second: Are prediction markets operating within the law, or are they defying the law and improperly infringing on state sovereignty?" Senator Ted Cruz said. He pointed to recent high-profile instances of alleged game tampering, including two Major League Baseball pitchers accused of taking bribes in exchange for adjusting their own throws, and noted the cancellations of UFC fights due to suspicions of match fixing.

"These incidents sow doubt in the minds of fans. That is why sports leagues, and casinos, and regulators have to work together to identify, to investigate and to root out manipulation." Cruz said.

Other lawmakers questioned the advertising techniques of prediction market companies such as Kalshi and Polymarket, which allow anyone 18 and older to legally bet on topics ranging from phrases a particular celebrity might make at an event to predictions surrounding the assassination of Iran's Ayatollah Ali Khamenei. A senator raised concerns that the companies' social media advertisements could reach young people at risk of problem gambling.

Patrick McHenry, senior adviser for the Coalition for Prediction Markets, said the sites ban bettors under 18 and that the average age of users is 33. Sportsbooks require bettors to be 21 years old.

"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: Prediction markets benefit from greater participation, liquidity, and more accurate information, not from consumers losing money," McHenry said.

Harry Levant, director of gambling policy at the Public Health Advocacy Institute, outlined concerns about gambling addiction to the subcommittee, pointing to his personal history of problematic gambling as evidence of how the practice can spiral for some individuals. "This is not a Republican issue or a Democrat issue. This is a human issue regarding an addiction crisis that needs to be addressed and prevented," Levant said.

Thirty-nine states and Washington, D.C., have legalized some form of mobile sports gambling after a 2018 Supreme Court decision opened the door for states to do so. Sports betting revenue reached $16.96 billion in 2025, according to the American Gaming Association. Minnesota enacted a ban on prediction markets operating within its borders, and more than a dozen states have introduced bills to regulate or restrict prediction market platforms, according to the National Conference of State Legislatures. Prediction market companies argue they should be overseen by the federal government and classified as a financial product known as a futures contract rather than as gambling services. The Trump administration supported that view by suing states that attempted to regulate the industry.