Ted Cruz

Senators eye crackdown on prediction markets advertising to minors

Sen. Ted Cruz, R-Texas, speaks Wednesday at a Senate subcommittee hearing focused on the recent surge in popularity of sports betting and betting by minor. Photo by Erika Tulfo/Medill News Service

WASHINGTON, May 20 (UPI) — As sports betting and prediction market platforms like Kalshi and Polymarket grow in popularity, U.S. senators on Wednesday weighed the need to regulate use of the platforms by minors.

One main issue senators raised during a hearing by the Senate Commerce Subcommittee on Consumer Protection, Technology and Data Privacy was how prediction markets use social media to advertise their platforms to underage users, putting them at risk of a gambling addiction.

“Young people are being inundated with advertisements on social media. Their favorite influencers and sports figures are introducing minors to betting,” said Sen. Marsha Blackburn, R-Tenn., who chaired the hearing.

“This is not safe. It needs to stop, and advertising to minors is disgusting,” Blackburn said.

The “No Sure Bets: Protecting Sports Integrity in America” hearing was intended to discuss the prevalence of sports betting and its impact on the integrity of matches.

It followed a unanimous Senate vote last month to ban its members and their staffs from trading on prediction market platforms, and the senators seemed determined to do more. Issues surrounding gaming continue to be a hot topic in Congress, where more than 10 active bills are related to prediction markets.

Some recent high-profile scandals surrounding prediction market platforms have also drawn attention to the industry, including the arrest of U.S. Army soldier Gannon Van Dyke last month. He was charged with using classified information to profit from a Polymarket wager related to the capture of Venezuelan president Nicolás Maduro in January.

In the same month, Kalshi fined and suspended from its platform three congressional candidates for betting on the outcomes of their own elections.

In the hearing, Sen. John Hickenlooper, D-Colo., criticized prediction markets like Kalshi for hiring social media influencers to promote their platforms to adolescent users.

“I think it’s specifically dangerous for minors to get into sports betting, and especially on prediction markets. That’s why almost all the states say [the legal betting age] is 21, not 18,” Hickenlooper said.

“Prediction markets let users as young as 18 bet on sports, but they also market their products to younger, more vulnerable audiences who are in many cases adept at getting around the platform precautions.”

A study released in January by Common Sense Media found that more than one-third of adolescent boys aged 11 to 17 admitted to engaging in gambling over the past year. Almost 60% of those who have been gambling said that they were exposed to gambling content through social media.

Kalshi, in an email, denied advertising to minors and pointed to recently implemented consumer protection measures, including requesting a selfie from the user to supplement documents verifying their age.

Hickenlooper grilled Patrick McHenry, a former U.S. representative now acting as senior adviser to the Coalition for Prediction Markets, on the guardrails to ensure underage users could not access their platforms.

McHenry pointed to the Commodity Futures Trading Commission, which oversees prediction markets and regulates them as a form of financial derivative rather than an avenue for gambling.

“The CFTC is a cop on the beat. It has the capacity to oversee this market, just as they’ve done with a broader commodities marketplace that has been around and well-versed for decades,” he said.

The Commodity Futures Trading Commission’s jurisdiction over prediction markets has been a contentious topic, since users can trade event contracts related to sports, weather, politics and more.

The Prediction Markets Are Gambling Act, which Sen. Adam Schiff, D-Calif., introduced in March, seeks to ban prediction markets from listing contracts that resemble sports bets, arguing that such contracts are considered gambling and should be subject to state regulation.

The agency argues that sports event contracts were treated as “swaps,” a term used to describe events that have potential economic consequences.

But Sen. Ted Cruz, R-Texas, pushed back against the classification of sports contracts on prediction markets as financial derivatives.

“What is the economic consequence of whether a pitcher throws a ball or strike?” he asked.

Another bill specifically targeting digital gambling advertisements to minors was introduced Monday. Sens. Richard Blumenthal D‑Conn., and Katie Britt, R‑Ala., are advocating the Gaming Advertisement to Minors Enforcement Act, which would implement a federal ban on sports betting ads on social media platforms for minors.

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Trump builds momentum with at least 3 more wins; Rubio drops out, Kasich takes Ohio

Donald Trump romped to victory Tuesday in Florida, chasing Marco Rubio from the race, but Ohio Gov. John Kasich won his home state, raising hopes for those seeking to stop Trump and settle the presidential contest on the floor of the Republican National Convention.

Trump also won North Carolina and Illinois and was locked in a close fight with Sen. Ted Cruz in Missouri.

“I’m getting ready to rent a covered wagon, we’re going to have a big sail and have the wind blow us to the Rocky Mountains and over the mountains to California,” Kasich said at a jubilant rally outside Cleveland.

That is just the sort of extended nominating fight the GOP establishment sought to avoid by stacking the political calendar with big early contests, capped by Tuesday night’s winner-take-all primaries in Florida and Ohio. California votes on June 7, near the close of the primary season.

Now, many of those same party types see an inconclusive nominating contest as the best and perhaps only chance of thwarting Trump, even if it threatens to shred the GOP in the process.

The setback in Ohio, where Trump campaigned hard, was his most disappointing performance since he finished second to Cruz in February’s Iowa caucuses.

His unhappiness was evident as he addressed reporters at his posh Mar-a-Lago private club in Palm Beach, Fla., and complained about the miseries of running for president.

“Lies, deceit, viciousness. Disgusting reporters. Horrible people,” the Manhattan businessman and reality TV star said. “Some are nice.”

Cruz, speaking with 99% of the Missouri votes counted, once more insisted he was the only candidate who could defeat Trump.

“Starting tomorrow morning, every Republican has a clear choice. Only two campaigns have a plausible path to the nomination — ours and Donald Trump’s,” the Texas senator told supporters in Houston. “Nobody else has any mathematical possibility whatsoever. Only one campaign has beaten Donald Trump over and over again.”

With Trump’s unmatched string of victories, no other candidate is nearly as well positioned to win the nomination ahead of the July convention in Cleveland. He padded his overall delegate lead with Tuesday’s victories, putting him ahead of Cruz and Kasich, who had not won a state before Ohio.

But there were signs Tuesday that not just the establishment but rank-and-file Republicans have yet to rally around the party’s polarizing front-runner.

Nearly 3 in 10 Republican voters across the five states said they would not vote for Trump if he wins the party’s nomination, according to exit poll interviews. Four in 10 said they would consider voting for a third-party candidate if the choice came down to Trump or the Democratic front-runner, Hillary Clinton.

Defections of that magnitude could badly undermine Trump in the general election, and that prospect will probably be stressed by his opponents going forward into next week’s contests in Arizona and Utah.

Rubio spoke to the controversy surrounding the GOP front-runner as he departed the race.

In a Miami concession speech delivered less than half an hour after the polls closed in Florida, the freshman senator congratulated Trump, wagging a finger and shushing members of the audience who booed his kind words.

Ohio Gov. John Kasich votes Tuesday in Westerville, Ohio.

Ohio Gov. John Kasich votes Tuesday in Westerville, Ohio.

(Matt Rourke / Associated Press)

Rubio then devoted the bulk of his lengthy remarks to warn against succumbing to the anger and frustration that have fueled Trump’s improbable rise.

“The politics of resentment against other people will not just leave us a fractured party,” Rubio said, as disconsolate family members stood by onstage. “They’re going to leave us a fractured nation” where people hate each other for their political views.

“Do not give in to the fear,” Rubio said. “Do not give in to the frustration.”

The son of Cuban immigrants and, at age 44, the youngest candidate in the field, Rubio was seen as one of the GOP’s rising stars, with a capacity to broaden the party’s support among millennial voters and the nation’s fast-growing Latino population.

But he failed to win more than a few contests and was never seriously competitive in his home state. Trump captured 99 delegates in Florida’s winner take-all-primary, more than a quarter of those at stake in Tuesday’s balloting.

The victory in winner-take-all Ohio gave Kasich 66 delegates, more than doubling his total but still leaving him well behind Trump. His goal is to build momentum with a series of wins positioning him as the strongest candidate heading into the Cleveland convention even if, as seems inevitable, Kasich is shy of the 1,237 delegates needed to win the nomination outright.

Pennsylvania, where Kasich was born, is the next big target on April 26.

The results Tuesday followed one of the oddest, most contentious weeks in a campaign that has been filled with strange and surreal moments.

The precipitating event was a racially charged near-riot at a Trump rally Friday night in Chicago, which was canceled out of security concerns.

Trump’s opponents quickly seized on the moment and the violent imagery that played around the world to once more challenge his temperament and fitness to be president. They accused him of fomenting the unrest through belligerent remarks that seemed to egg on his audiences into physically confronting dissenters.

Trump denied any responsibility, blaming the violence on what he called professional agitators linked to Democratic hopeful Bernie Sanders. He said the protesters provoked his supporters and were stifling their rights to free speech and assembly.

“I don’t condone violence,” Trump said repeatedly, though he sympathized with backers who chose to “be effective” with protesters in the audience. (Previously he used more pugilistic language.)

Trump said he might even pay the legal fees for a supporter who sucker-punched a demonstrator at a North Carolina rally, drawing widespread condemnation. He won the state anyway.

Indeed, for weeks increasingly desperate Republican opponents have mounted an effort to stop Trump, to seemingly little effect.

More than $10 million in negative ads blazed across the Florida airwaves in just the last week alone, attacking Trump for his ethics, the failings of his business empire and his all-over-the-map political ideology.

Those meant nothing to Mark Owens, who stepped into the Miami Beach sunshine Tuesday and lighted a cigar after casting a ballot for the political neophyte.

“We’ve trusted politicians for 200 years to run our country,” Owens said. “It’s time to give someone else a shot.”

With polls suggesting Florida was firmly in Trump’s grasp, much of the campaign focused on Ohio, another traditional fall battleground.

Trump laid on extra events, including an election-eve rally outside Youngstown in place of a planned Florida appearance, and he turned his attention to attacking Kasich after long ignoring the Ohio governor.

He assailed him for his support as a congressman for the North American Free Trade Agreement, a pact with Canada and Mexico that, Trump said, devastated the state’s economy. He also laid on personal insults in a bid to snatch a victory in Kasich’s home state and clear the governor from the race.

Kasich, whose strategy centered on staying above the salvos flying among other candidates, accused Trump of creating a “toxic” political atmosphere and, wrapping himself in the establishment mantle, spent Monday stumping alongside Mitt Romney, the party’s 2012 nominee.

With Kasich suddenly a factor in the GOP contest, the skirmishing here in Ohio seems a likely preview of what is to come.

While he pledged to take the high road at his victory party Tuesday night, Kasich sent a different message speaking to reporters earlier in the day.

He said, “I will be … forced going forward to talk about some of the deep concerns I have about the way this campaign has been run by some others — by one other in particular.”

There is no doubting who he had in mind.

mark.barabak@latimes.com

Twitter: @markzbarabak

Times staff writers Michael Finnegan, Kurtis Lee and Seema Mehta in Los Angeles and Kate Linthicum in Miami contributed to this report.



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