Senate Subcommittee Probes Sports Betting Industry Amid Cheating Scandals

On Wednesday, a Senate subcommittee questioned sports betting industry representatives about recent cheating scandals, aggressive marketing practices, and regulatory challenges. Lawmakers expressed concerns over the impact of legalized gambling and the integrity of sports.

During the hearing, Senator Ted Cruz (R-Texas) highlighted two main issues: maintaining the integrity of sports amidst sports betting and ensuring prediction markets operate legally without infringing on state authority. He mentioned recent examples of alleged game tampering, such as MLB pitchers accused of accepting bribes and UFC match cancellations due to suspected match-fixing.

“These incidents sow doubt in the minds of fans. That is why sports leagues, casinos, and regulators must collaborate to detect, investigate, and eliminate manipulation,” Cruz said.

Lawmakers also scrutinized the advertising strategies of prediction market companies like Kalshi and Polymarket. The platforms allow legal betting on a wide range of topics, but ads on social media could potentially target young people susceptible to problem gambling. Sen. John Hickenlooper (D-Colo.) voiced these concerns, noting the risks to younger demographics.

Patrick McHenry, senior adviser for the Coalition for Prediction Markets, told the subcommittee that these sites ban users under 18 and have an average user age of 33. In contrast, sportsbooks require users to be at least 21 years old. The rapid growth of online sports betting since 2018, legalized in 39 states and D.C., has led to a record revenue of $16.96 billion in 2025, according to the American Gaming Association.

Amid this growth, concerns about cheating scandals and gambling addiction persist. Harry Levant of the Public Health Advocacy Institute highlighted these issues and drew from his own gambling struggles to emphasize the addiction crisis.

“This is a human issue needing urgent attention and prevention,” Levant stated.

Bill Miller, CEO of the American Gaming Association, argued online gambling is among the most regulated industries in the U.S. He emphasized its economic importance.

Recently, Minnesota became the first state to ban prediction markets, prompting a potential legal confrontation with the Trump administration. Over a dozen states have proposed bills to regulate these platforms. Prediction market firms advocate for federal regulation, not state-level control, proposing they be treated as financial products like futures contracts. The Trump administration supports this perspective and has challenged states attempting to restrict the industry.

In his committee remarks, McHenry contended that equating prediction markets to traditional gambling reveals a misunderstanding. He clarified that, unlike casinos where the house profits from customer losses, prediction markets facilitate trades among participants. The platform earns transaction fees, and the focus is on participation, liquidity, and accurate information.