A bipartisan pair of U.S. Senate legislators are set to introduce a bill that would prohibit prediction market platforms from offering sports-related contracts. Adam Schiff (D-CA) and John Curtis (R-UT) are behind the proposal, which targets platforms such as Polymarket and Kalshi, which the senators argue are effectively operating unlicensed sports betting services. The forthcoming legislation was first reported by the Wall Street Journal.
The bill would bar any entity registered with the Commodity Futures Trading Commission from listing contracts that resemble sports bets or casino-style games. It would also, according to the senators, reaffirm that the Commodity Exchange Act was never intended to permit sports gambling. Curtis argued that too many young people in Utah are being exposed to addictive sports betting and casino-style gaming contracts that he believes belong under state rather than federal oversight.
The proposal arrives amid a broader legal battle between prediction market platforms and state governments. Over the past year, a growing number of states have filed lawsuits against major prediction market operators, contending that their sports-related offerings must comply with state gambling regulations. The platforms have countered that, because their products are structured as event contracts, federal regulation by the CFTC is the appropriate framework.
Courts have not consistently accepted that argument. On Friday, Nevada became the first state to successfully obtain a temporary ban on Kalshi’s operations within its borders, as the state’s lawsuit against the company moves toward trial. Separately, Arizona filed criminal charges against Kalshi last week, alleging the company operated an illegal gambling service and permitted unlicensed election wagering.
Kalshi responded critically to the proposed legislation. A company spokesperson told Decrypt that the bill would drive activity offshore and shield the existing monopoly held by U.S. casinos. “It’s clear this bill is motivated by casino interests that are threatened by competition,” the spokesperson said, adding that the bill’s backers were more focused on protecting monopolies than on consumer welfare. Data from Dune indicates that sports-focused markets account for over 80% of Kalshi’s lifetime trading volume.
The Trump administration’s CFTC has taken a firm stance in favor of prediction market platforms throughout the ongoing jurisdictional dispute, a conflict that may ultimately be resolved by the Supreme Court. CFTC Chair Mike Selig has pledged agency resources to support companies contesting state regulators. The states challenging the CFTC’s legal position span the political spectrum, from Massachusetts to Tennessee. Last month, Utah’s Republican Governor Spencer Cox criticized the federal agency’s approach, saying the platforms are harming families and young men in particular.
Opposition to prediction markets is also growing in the House. Representative Alexandria Ocasio-Cortez (D-NY) added her voice to the debate on Friday, warning that pervasive gambling is harmful to society. She argued it traps people in addiction and debt, contributes to domestic violence, and creates conditions for manipulation. Her remarks acknowledged the political risk of taking on well-funded industry interests.
Originally reported by Decrypt.
