After Tuesday's Hearing, Congress Looks Ready to Legislate on Prediction Markets — Not Just Watch
The House Agriculture Subcommittee held a two-hour hearing on 22 July examining sports event contracts, with witnesses from the American Gaming Association, tribal gaming, and both sides of the CFTC authority debate. Chair Dusty Johnson said Congress 'cannot afford to be silent' and signalled there is 'work for them to do.' Witnesses urged members to advance H.R. 7840, the Event Contract Enforcement Act, which would ban sports event contracts outright.
The House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development held a two-hour hearing on 22 July titled 'Examining Customer Protections and Market Integrity in Sports Event Prediction Markets.' Subcommittee Chair Dusty Johnson (R-SD) said it is 'abundantly clear that Congress cannot afford to be silent' on the issue, and closed by saying there is 'work for them to do.' It is the clearest signal yet from a committee chairman with jurisdiction over the CFTC that legislative action is now likely, not hypothetical.
Witnesses called for Congress to advance H.R. 7840, the Event Contract Enforcement Act, which would ban sports event contracts nationwide — a statutory resolution that would supersede both the CFTC's proposed rule (whose comment window closes 27 July) and all ten active state lawsuits. Rep. Jill Tokuda (D-HI) was the session's bluntest voice: 'This is gambling. It's gambling.' Former CFTC attorneys Robert Schwartz and Carl Kennedy argued the opposite — that the CFTC already has the statutory authority it needs and that new legislation would disrupt a regulatory framework that is working. No representative from Kalshi, Polymarket, or any other prediction market platform testified.
For UK readers, the H.R. 7840 scenario is the one that matters most: if Congress were to ban sports event contracts, it would confirm that the US federal regulatory pathway for prediction markets is narrower than it appeared. That would slow any potential transatlantic expansion, since UK regulators and the FCA tend to follow the direction of US regulatory precedent in novel product categories. Conversely, if Congress passes legislation explicitly authorising CFTC oversight of sports event contracts, it would be the strongest possible signal that prediction markets are a permanent, federally sanctioned product class — and a strong argument for a UK regulatory framework to follow.
The hearing adds a third active front to a fight already being waged in ten state courts and through the CFTC's own rulemaking. The prediction markets sector now has to manage a congressional timeline alongside the judicial one. Chair Johnson stopped short of endorsing any specific bill, and the Republican majority has been more sympathetic to CFTC authority than Democrats. But the language from the chair — 'Congress cannot be silent', 'there is work to do' — marks a shift from the committee's prior posture of observation toward something closer to intent.
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