TLDR Republican senators grilled prediction market advocate Patrick McHenry at a Senate subcommittee hearing on sports integrity Sen. Ted Cruz compared prediction markets to sports betting, questioning their regulatory justification The American Gaming Association piled on, calling out prediction markets for infringing on the gambling industry Senators and witnesses agreed that prop bets and micro bets pose the biggest threat to sports integrity Bipartisan pressure is mounting on Capitol Hill against prediction markets despite the Trump administration’s pro-market stance
The Senate Consumer Protection Subcommittee held a hearing Wednesday that was supposed to focus on sports integrity but quickly turned into a pointed examination of prediction markets.
Patrick McHenry, a former congressman now serving as Senior Advisor to The Coalition for Prediction Markets, faced tough questioning from members of both parties. The hearing was titled “No Sure Bets: Protecting Sports Integrity in America.”
Subcommittee Chair Marsha Blackburn opened the session by raising concerns about gambling addiction, harassment of college athletes, and prediction markets operating outside state regulation. She set the tone for what became a two-hour grilling.
Republicans Break From Pro-Market Stance
The hearing marked a shift from the friendlier treatment prediction markets received at a House Agriculture Committee hearing last month. At that earlier session, Republicans were notably warmer toward CFTC head Mike Selig.
Sen. Ted Cruz said prediction markets have started offering event contracts on sporting events that are “for all intents and purposes sports bets.” He pressed McHenry on whether the CFTC’s justification for allowing these contracts holds up.
Cruz asked what the economic consequence of a pitcher throwing a ball or a strike could possibly be. McHenry responded that it is up to consumers to decide what qualifies as a swap under Dodd-Frank’s broad definitions.
Sen. John Curtis pushed McHenry on the basic structure