TLDR
- Five Democratic lawmakers sent a letter to 12 CEOs of sportsbooks and prediction markets over concerns about targeting young adults aged 18-24
- Kalshi was called out for a TikTok ad where a user claimed to earn two years’ rent from trading on the platform
- An Ipsos poll found young men aged 18-24 are twice as likely as others to use sports betting, fantasy, or prediction market apps
- The lawmakers want answers to 12 questions by May 29 and have requested a briefing on the issue
- Previous bills like the SAFE Bet Act have not advanced to committee hearings in Congress
Five Democratic members of Congress sent a letter on Monday to 12 CEOs of online sportsbooks and prediction market platforms. The letter raised concerns about how these companies are reaching young adults through their advertising.
The group includes U.S. Reps. Valerie Foushee, Paul Tonko, Betty McCollum, Kevin Mullin, and U.S. Sen. Richard Blumenthal. They accused the platforms of using what they called “predatory advertising” aimed at Americans aged 18-24.
The five-page letter was sent to companies including bet365, Kalshi, Polymarket, Caesars, BetMGM, DraftKings, FanDuel, Robinhood, Fanatics, and PrizePicks.
Kalshi TikTok Ad Draws Scrutiny
Kalshi was singled out for a TikTok ad in which a person claimed they made enough money on the prediction market to cover two years of rent. The lawmakers said this kind of messaging is harmful to younger users.
They also pointed to partnerships between prediction markets and major news outlets like CNN, CNBC, Dow Jones, and Yahoo Finance. The lawmakers argued these partnerships create an environment where Gen Z is more likely to see gambling as normal.
Sports betting companies were also criticized. The letter called out bet365’s “Winning is Everything” campaign as an example of aggressive advertising in a competitive market.
An Ipsos poll from two months ago found that young men aged 18-24 are twice as likely as anyone else to use a daily fantasy, prediction market, or sports betting app. The lawmakers pointed to this data as evidence that the advertising is working.
“These trends point towards a broader shift towards normalizing a new, unregulated form of betting for the next generation,” the letter stated.
All 12 companies that received the letter are currently regulated. Sportsbooks operate under state-level rules, while prediction markets fall under federal oversight.
Previous Legislative Efforts Stall
Several states have already taken prediction markets to court. They are seeking to block these platforms from offering contracts on sporting events.
Lawmakers at both the federal and state level have filed bills to either ban prediction markets from sports events or require them to follow state regulations and tax policies.
The five lawmakers acknowledged that some operators have taken steps to address these issues. However, they called those efforts “insufficient” and “reactive.”
The letter asked the 12 CEOs to answer a set of 12 questions by May 29. The lawmakers also requested a briefing on the topic of targeting young adults.
This letter follows earlier legislative efforts by some of the same lawmakers. Last year, Tonko and Blumenthal introduced the SAFE Bet Act, which would place federal regulations on sports betting advertising during live events and ban bonus promotions.
The SAFE Bet Act would also require affordability checks on customers who wager $1,000 or more in 24 hours or $10,000 or more in 30 days. It would ban prop betting on college and amateur athletes.
Blumenthal also filed a separate bill to use a portion of the federal sports betting excise tax to fund state-level problem gambling programs. None of these bills have received a committee hearing.
A Senate hearing on sports betting integrity is scheduled for next week. It will be led by U.S. Sen. Marsha Blackburn. American Gaming Association CEO Bill Miller and IC360 Co-Founder Scott Sandin are set to testify.
