TLDR
- Senators Adam Schiff and John Curtis introduced a bipartisan bill to ban sports and casino contracts on regulated platforms.
- The proposed law would amend the Commodity Exchange Act to restrict certain event contracts.
- The bill would apply to professional and college sports as well as casino-style games.
- Lawmakers said the measure would reinforce state authority over gambling laws.
- Kalshi said a ban would push trading activity to offshore platforms without regulation.
U.S. senators introduced a bipartisan bill to block sports and casino-style contracts on federally regulated platforms. The proposal targets companies registered with the Commodity Futures Trading Commission, including Kalshi and Polymarket’s U.S. platform. The Wall Street Journal reported the measure as the first direct Senate effort against these contracts.
Senators Target Prediction Markets in New Bill
Sens. Adam Schiff, D-Calif., and John Curtis, R-Utah, introduced the “Prediction Markets Are Gambling Act” on Monday. The bill would amend the Commodity Exchange Act and prohibit listed sports or casino-style contracts. It would apply to professional and college sports, and also to games like blackjack and roulette.
Schiff said the CFTC is “greenlighting these markets and even promoting their growth.” He argued Congress should “eliminate this backdoor which violates state consumer protections.” Curtis said young people face exposure to “addictive sports betting and casino-style gaming contracts.”
The bill states it would not override state gambling laws or related contracts. It reinforces state authority while imposing federal limits on registered platforms. Lawmakers framed the measure as a bipartisan response to regulatory gaps.
Industry and States Clash Over Regulation
A Kalshi spokesperson said a ban would push activity offshore “where no regulation exists.” The spokesperson argued the proposal reflects “casino interests that are threatened by competition.” Kalshi also said regulated markets provide a “fairer choice” without a traditional house model.
Platforms such as Kalshi and Polymarket list binary contracts across crypto, politics, weather, and culture. However, trading activity has centered on professional and college sports. That focus places them in competition with sportsbooks like FanDuel and DraftKings.
The CFTC filed a February brief asserting exclusive jurisdiction over event contracts. The agency argued that states lack authority over federally regulated platforms. States have challenged that position in several courts.
Nevada secured a temporary restraining order blocking certain contracts from Kalshi. Arizona filed criminal charges against Kalshi’s parent companies for alleged unlicensed gambling. Kalshi disputed those claims and urged Arizona to withdraw the charges.
Massachusetts and Michigan also filed lawsuits against Kalshi over gambling allegations. Polymarket sued Michigan to prevent the enforcement of state gambling laws. A Ninth Circuit panel denied Kalshi’s emergency stay request in a Nevada case.
Market Growth Continues Despite Legal Pressure
Sports leagues have raised concerns about manipulation and insider activity. However, Major League Baseball signed a licensing deal with Polymarket for league data access. The agreement requires cooperation to monitor betting activity.
Kalshi and Polymarket have explored fundraising at valuations near $20 billion. Reports cite rising trading volumes and broader interest in event-based contracts. Market makers include Susquehanna International Group and Jump Trading.
Tradeweb Markets partnered with Kalshi to distribute prediction market data. The partnership expands institutional access to pricing information. The Senate bill now advances as legal disputes continue across multiple jurisdictions.
