The U.S. gaming industry just wrapped up another record-breaking year – but that’s never indicative of smooth sailing. Between the rising black market, prediction markets spreading nationwide and heightening political tensions, business is booming, but so are the regulatory pressures.
In this edition of Letter From America, we’re kicking off with the latest from the CFTC, which opened public consultations yesterday, signalling that major rule changes are imminent.
CFTC Regulatory Reset Begins
The Commodity Futures Trading Commission (CFTC) is shaking things up. It has issued an Advanced Notice of Proposed Rulemaking, opening a 45-day consultation to ask whether prediction markets need new rules – and what those rules should look like.
The notice delves into how existing regulations apply to event contracts, what core principles should govern them and whether certain contracts should be banned as contrary to the public interest, plus a smattering of “other topics”.
And while feedback will not directly translate into regulation, it’s the first step in CFTC Chair Michael Selig’s promised rulebook change-up and provides the industry with a chance to have its say.
Morality Rules
The CFTC isn’t the only one eyeing prediction market products. Congress has also stepped in, with a new bipartisan act aiming to curtail morally dubious event contracts landing in Washington.
The Event Contract Enforcement Act (ECEA) would restrict contracts based on “terrorism, assassination, war, gaming, illegal activity, election outcomes, government activities or other activities determined by the Commodity Futures Trading Commission to be contrary to the public interest”.
The act also confirms states’ rights to decide whether sports event contracts are offered within their territory.
While support is gathering quickly on Capitol Hill, the administration under the current president, with its close ties to prediction markets, means this act faces a tough road ahead.
The POINTS Act
ECEA isn’t flying solo in Congress. A second bipartisan proposal hit this week: The Providing Opportunities for Individuals in Need of Treatment and Support Act (POINTS).
This federal legislation aims to boost prevention, treatment and recovery services for gambling addiction by redirecting part of the federal excise tax on sports wagers.
If passed, it would be a major win for responsible gambling, funnelling around US$100 million (£75.4m) a year into treatment programmes. It’s also the first piece of federal legislation on gambling addiction in more than 15 years.
According to the proposal’s sponsors, the rationale is clear: “Nearly 20 million Americans show signs of problem gambling, contributing to an estimated $14 billion in annual social costs.”
Indiana’s Clean Sweep
Indiana has slammed the door on sweepstakes casinos. House Bill 1052, signed by Governor Mike Braun (R) yesterday, takes effect on July 1, banning sweepstakes and fining operators up to US$100,000 (£74,270) if they do not cease trading.
Indiana joins a growing number of states taking action: California, New York, Montana, Connecticut and New Jersey enacted similar bans in 2025, adding to Idaho, Washington and Michigan’s pre-existing restrictions.
Other states, including West Virginia, Tennessee, Delaware, Maryland, Arizona and Minnesota, have also given these gaming sites the boot via cease-and-desist orders.
Underdog Rising
Brooklyn-based sportsbook operator Underdog has just snapped up Aristotle Exchange, a CFTC-regulated designated contract market, for an undisclosed–but presumably large–sum.
The acquisition allows Underdog to ditch its third-party deal with Crypto.com, start offering event contracts directly and gain greater control over the markets it lists.
“Prediction markets are mostly about sports,” said CEO Jeremy Levine. “And no company knows how to engage sports fans better than Underdog.”
Prop Bets Under The Microscope
Lawmakers in Kentucky, Minnesota, Utah and Louisiana are hoping to rein in college prop bets and better protect student-athletes with active bills in each of their legislative sessions.
The bone of contention–long viewed as problematic by the National Collegiate Athletic Association–is that betting on personal performance puts a target on athletes’ backs and leaves games open to manipulation.
So far, Maryland, Ohio, New York and Vermont have complete prop bet bans, while Connecticut, Illinois, Iowa and New Jersey prohibit prop betting on college games.
BetBlocker Gains Ground
March marks Problem Gambling Awareness Month in the U.S., and while regulators debate policy, BetBlocker has been quietly gaining traction. The free blocking and scheduling tool launched just last year, but it’s already getting backing from major operators.
“We’re already live in every U.S. state and we’ve received support from across the licensed U.S. market, with partners like the Responsible Online Gaming Association (ROGA), DraftKings, BetMGM, Bally’s and FanDuel helping raise visibility”, said BetBlocker Founder Duncan Garvie.
He added: “We supported almost 20,000 U.S. users in 2025, and right now we’re on track to see an increase of 35 percent in 2026 – that’s thousands of additional people finding the support they need.”
