Senator Ted Cruz (R-TX) used a Senate Commerce Committee hearing Wednesday to warn that the boom in prediction markets may be tempting athletes to fix their own games.

“We want athletes competing on merit, but the opportunity to make money can tempt gamblers, and sometimes even athletes themselves, to guarantee a sure bet,” the Texas Republican said. He argued that high-profile cheating cases “sow doubt in the minds of fans.”

Cruz pointed to NBA players accused of feeding insider information to bettors, two MLB pitchers who allegedly rigged their own pitches, and MLS players banned for intentionally drawing yellow cards.

The Real Money Is In The Tickers

DraftKings (NASDAQ:DKNG) and Flutter Entertainment (NYSE:FLUT) have spent 2026 watching Kalshi and Polymarket eat into the sports betting business they once controlled.

Part of the migration is structural. Prediction markets often offer tighter pricing and, unlike traditional books, they do not throttle or ban sharp bettors who keep winning.

DKNG just picked up a rare sell-equivalent rating from BNP Paribas, which flagged the “dramatic threat” from prediction markets even after DraftKings rolled out its own prediction app.

Both stocks are down sharply year to date, and the Senate scrutiny may cut in their favor if lawmakers decide CFTC-regulated platforms are operating as unlicensed sportsbooks.

Sports reportedly account for roughly 90% of Kalshi volume, which is exactly the revenue traditional books like FanDuel parent Flutter want protected.

Where Prediction Markets Price The Fight

Cruz closed by suggesting the “Supreme Court may have to decide the issue.”

Polymarket bettors currently price around a 23% chance the Supreme Court takes a sports event contract case by the end of 2026. A ruling against Kalshi could reopen the door for states to enforce gambling laws, a scenario that would likely benefit the licensed operators.

The Commodity Futures Trading Commission, meanwhile, is suing states from Arizona to Minnesota to defend its jurisdiction. It is doing so with just one sitting commissioner, leaving the federal shield protecting these platforms thinner than it looks.

Benzinga previously reported that FairPredicts, a self-described nonpartisan “watchdog,” is running a six-figure ad campaign in Washington, D.C. that targeted Kalshi ahead of Wednesday’s hearing.

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