Democrats Escalate Federal Scrutiny of Sports Betting and Prediction Market Advertising Targeted at Young Adults
Five Capitol Hill Democrats sent a letter Monday to a dozen CEOs of online sportsbooks and prediction markets. The letter raises concerns about the impact their apps are having on America’s young adults.
The lawmakers — U.S. Reps. Valerie Foushee (N.C.), Paul Tonko (N.Y.), Betty McCollum (Minn.), Kevin Mullin (Calif.), and U.S. Sen. Richard Blumenthal (Conn.) — called a foul on operators’ outreach efforts to those aged 18-24. “We are particularly alarmed by the rapid normalization of online gambling among younger Americans and the targeting of this demographic through predatory advertising,” their five-page letter stated.
This marks another inflection point in the ongoing federal push to regulate youth-targeted ads in sports betting and prediction markets. It links directly to the SAFE Bet Act and broader state-level clashes with the CFTC over event contracts.
Lawmakers Zero In on Specific Campaigns and Partnerships
The letter specifically called out Kalshi for a TikTok ad in which someone boasted they were able to acquire two years’ worth of rent by trading on the prediction market platform. Lawmakers claimed the platform’s partnerships with news outlets such as CNN, CNBC, Dow Jones, and Yahoo Finance have created an environment where Gen Z is more susceptible to a culture of “everything is gambling.”
They also criticized sports betting platforms. In particular, they targeted bet365’s “Winning is Everything” campaign for increasing advertising volume in a more competitive landscape.
The lawmakers cited an Ipsos poll from two months ago. It found young men aged 18-24 are twice as likely as anyone else to use a daily fantasy, prediction market, or sports betting app.
“These trends point towards a broader shift towards normalizing a new, unregulated form of betting for the next generation,” the lawmakers wrote.
Regulatory Overlap and Ongoing State-Federal Tension
All operators that received the letter are currently regulated either as a sports betting operator at the state level or as a prediction market at the federal level. Several states have taken prediction markets to court seeking to block them from offering sports contracts in their jurisdictions.
Lawmakers in Washington and at the state level have filed bills seeking to ban prediction markets from sporting events or require them to abide by state regulations and sports betting tax policies. This creates a structural tension between federal CFTC oversight of event contracts and state gaming regulators’ insistence on licensing and taxation.
The letter arrives as the convergence of sports betting, prediction markets, and media platforms accelerates. What began as a debate over product classification has expanded into questions of audience protection and advertising standards.
Steps Taken, Yet Deemed Insufficient
Some operators have taken steps to address the issues at hand. The lawmakers acknowledged these efforts but called them “insufficient” and “reactive.”
They want a briefing on targeting young adults. The letter asks operators to answer 12 questions no later than May 29.
This demand reflects a pattern. Last year, Tonko and Blumenthal teamed up to file the SAFE Bet Act. The bill would place federal regulations on several aspects of sports betting, including a prohibition on sportsbooks’ advertising during live sporting events and a ban on promoting bonuses or other incentives.
It would also require affordability checks on customers who make $1,000 or more in wagers during a 24-hour period or $10,000 or more over 30 days. The bill would bar sportsbooks from offering prop betting markets on college and amateur athletes.
Blumenthal also filed a bill last year in the Senate, along with sister legislation in the House sponsored by U.S. Rep. Andrea Salinas (D-Ore.), that would earmark a portion of the federal sports betting excise tax to fund grants for states to address problem gambling issues. None of those bills has advanced to even receive a committee hearing.
Risks of Over-Regulation and the Counter-Argument
A risk exists that heightened federal scrutiny could blur legitimate distinctions between regulated sports betting and federally supervised prediction markets. Treating all event contracts as equivalent to traditional sports wagering risks undermining the innovation that has drawn new audiences and liquidity to these platforms.
Operators operate under existing state licenses or CFTC frameworks. Aggressive ad restrictions or new federal mandates could drive marginal customers toward less regulated channels rather than achieve the stated goal of youth protection.
At the same time, the industry cannot ignore generational patterns. If young adults increasingly view prediction markets and sports betting as interchangeable daily activities, the long-term legitimacy of both verticals faces pressure.
Next week, U.S. Sen. Marsha Blackburn (R-Tenn.) will hold a hearing on sports betting integrity issues. American Gaming Association President & CEO Bill Miller and IC360 Co-Founder and CEO Scott Sandin are scheduled to testify.
The Bottom Line
The Democratic letter signals continued congressional interest in advertising practices that reach 18-24 year olds across sports betting and prediction markets. While the SAFE Bet Act and related proposals have not yet advanced, the combination of legislative pressure, state court actions, and demands for detailed operator responses creates a defining moment for how the industry demonstrates accountability.
Client-partners should treat this not as isolated criticism but as part of a broader regulatory convergence. Clear, data-driven responses that distinguish between compliant outreach and genuine harm reduction will matter more than defensive posture. The path forward lies in aligning innovation with demonstrable safeguards that protect the next generation while preserving the integrity of regulated markets.
