Senator Richard Blumenthal and Representative Paul Tonko are intensifying their push for federal gambling reform, with a new focus on prediction markets. This effort is part of a broader initiative aimed at enhancing consumer protections and regulatory oversight amid growing connections between wagering companies, sports organizations, and technology platforms.
On Wednesday, the lawmakers joined forces with the Public Health Advocacy Institute (PHAI) and Families and Friends of Gamblers (FFG) to introduce the initiative titled "Truth and Integrity: The Movement for Gambling Reform." The campaign emphasizes the need for congressional hearings, establishes minimum federal safety standards, strengthens state enforcement, and calls for greater public accountability from the gambling industry and its partners.
"Prediction markets exploit those with gambling problems, capitalizing on their vulnerabilities to increase profits," Blumenthal stated. He emphasized the urgent need for public awareness, likening the gambling industry's practices to exploitation that occurs right in front of the public.
Both lawmakers have been persistent critics of the sports betting market, now extending their scrutiny to prediction markets as they integrate into the online gambling landscape. Tonko noted the rapid growth of these markets, comparing them closely with traditional sportsbooks. "In this new environment, sports betting permeates every aspect of sports and entertainment. Parents deserve to take their children to games without being bombarded by gambling advertisements," he asserted.
He drew a parallel between today’s sportsbooks and the practices of big tobacco in previous decades, highlighting historical concerns about deceptive advertising and public health.
The initiative’s legislative goals include conducting investigative hearings and creating minimum safety standards while also fostering stricter regulations at the state level. Support has already begun to materialize from legislators in several states.
This movement formalizes a coalition that views sports betting, prediction markets, technology firms, and sports organizations as interconnected challenges in consumer protection. Operators often assert their event contracts qualify as federally regulated financial products. In contrast, Blumenthal and Tonko advocate for a more robust regulatory framework governed by state gambling laws.
PHAI has taken further steps to highlight its position against major gambling companies, filing a product liability lawsuit in March against DraftKings, FanDuel, Genius Sports, and the NFL. This lawsuit accuses these companies of marketing sports betting products that encourage addictive behavior, particularly through live in-game betting.
Earlier this year, Blumenthal introduced the Prediction Markets Security and Integrity Act, which seeks to establish federal norms against insider trading, fraud, market manipulation, and access for underage individuals. The bill would bar prediction markets involving sensitive topics like military conflict and would mandate age verification and restrict advertising aimed at minors.
Blumenthal's proposal aims to challenge the Commodity Futures Trading Commission’s stance that federal commodities law supersedes state gambling regulation, seeking to return regulatory authority to the states, which many state attorneys general and gaming regulators are currently pursuing through legal means.
Additionally, the proposed legislation would go beyond traditional sports betting to require states to comply with federal advertising, affordability, and artificial intelligence standards.
In July, Blumenthal took a strong position against the CFTC’s perceived overreach in regulation, joining Senator Jeff Merkley and other Democrats to argue that sports event contracts mimic the characteristics of sportsbook wagers yet evade essential legal responsibilities. Blumenthal's legislation advocates for a political resolution to this federal-state regulatory conflict amid ongoing court discussions.
The current initiative builds on the years of work Blumenthal and Tonko have dedicated to gambling reform. They have consistently advocated for the Supporting Affordability and Fairness with Every Bet Act, or SAFE Bet Act, which mandates that states with legal sports betting adhere to federal guidelines concerning advertising, affordability checks, and artificial intelligence use. Last year, Blumenthal reintroduced this measure while continuing to advance separate initiatives focused on funding gambling addiction prevention and treatment.
The legislators are also focusing on VIP programs within gambling platforms, with Blumenthal, Tonko, and Representative Valerie Foushee recently appealing to FanDuel to discontinue its VIP program, citing concerns that such structures may encourage problem gamblers to continue betting even as their losses mount.
