Several lawmakers pressed witnesses about a surge in ‘‘prediction markets’’ and event contracts offering bets on sporting events, public figures and geopolitical outcomes, questioning whether those contracts belong under the Commodity Futures Trading Commission’s remit.

Rep. Jim Costa said he sees "red flags" in event contracts and called them "unauthorized online gambling for everything from sports events to even war." Rob Schwartz, a former CFTC general counsel, replied that the statute delegates a public-interest determination to the CFTC but that the agency has not consistently used that discretion to block products the committee and some members view as improper.

Tribal sovereignty and state gaming compacts were raised repeatedly. Rep. Gabe Vasquez (New Mexico) warned that firms may be using CFTC product submissions to bypass tribal and state safeguards and that unregulated online sports betting could erode tribal revenue and protections.

Why it matters: Members said the issue raises legal and moral questions about whether contracts that look like bets should be permitted on CFTC-regulated platforms and whether the agency or Congress should set clearer limits.

Witnesses' positions were cautious but pointed. Ben Shifrin said the CFTC has been "leading promoter of crypto" and that the agency should not take on new responsibilities without resources. Rob Schwartz and other witnesses said the statutory definition of 'swap' is broad and that policymakers should decide where to draw lines on sensitive event contracts.

Next steps: Members indicated they will pursue additional submissions to the record and may seek statutory clarity in the reauthorization bill.