A bipartisan pair of U.S. senators plans to unveil legislation Monday that would bar prediction markets from offering sports-related wagers, escalating a high-stakes regulatory fight at the intersection of crypto, fintech and gambling.
What’s proposed
- Senators Adam Schiff (D-CA) and John Curtis (R-UT) are introducing a bill that would prohibit entities registered with the Commodity Futures Trading Commission (CFTC) from listing contracts that resemble sports bets or casino-style games. The Wall Street Journal first reported the impending legislation.
- The lawmakers say the measure would close what they see as a loophole allowing prediction-market platforms to offer sports gambling under the guise of event contracts, and would “reinforce Congress’ original intent that the Commodity Exchange Act does not permit sports gambling,” per their statement.
Who’s involved and why
- Platforms like Polymarket and Kalshi are the obvious targets. Last year a growing number of states sued major prediction markets, arguing that their sports-related markets must comply with state gambling laws. The platforms counter that event-tied wagers are federal commodities that fall under CFTC jurisdiction.
- The legal battle has seen mixed results in the courts. Nevada recently won a temporary victory, obtaining a state-level ban on Kalshi while its lawsuit moves toward trial. Arizona also filed criminal charges last week against Kalshi, alleging illegal gambling operations and unlicensed election wagering.
Supporters and critics
- Tribal and state gaming authorities back the bill’s goal of preserving state and tribal control over gambling. David Bean, chair of the Indian Gaming Association, said the legislation would help “protect consumers, sports integrity, and tribal and state sovereignty.”
- Critics — including a Kalshi spokesperson — argue the legislation would stifle competition and push activity offshore. Kalshi told Decrypt the bill is motivated by “casino interests that are threatened by competition” and would protect domestic casinos’ “monopoly.”
Regulatory backdrop and political pressure
- The Trump-era CFTC leadership has sided with prediction market firms in the jurisdictional fight; CFTC Chair Rostin Behnam (note: the article referenced the Trump CFTC—current agency leadership has signaled willingness to back the industry) has signaled the agency will devote resources to defend platforms in court. The ultimate resolution of federal vs. state authority could reach the Supreme Court.
- State plaintiffs span the political spectrum—from Democratic Massachusetts to Republican Tennessee—underscoring that concerns about prediction-market sports wagering are bipartisan.
- Political figures have added pressure: Utah Governor Spencer Cox criticized the CFTC’s approach, saying the platforms are “destroying lives,” and Rep. Alexandria Ocasio-Cortez warned that pervasive gambling “turns life into a casino” and contributes to addiction and social harms.
Market impact
- Sports-focused markets make up a large share of some platforms’ business. Dune data cited by the article shows that over 80% of Kalshi’s lifetime trading volume came from sports markets, meaning a successful ban could sharply affect liquidity and business models.
What’s next
- If introduced, the bill would plug a legislative gap states and tribes say these platforms exploit. Opponents warn of unintended consequences, including driving activity offshore and entrenching incumbent casino operators. Given the active court cases and strong political interest on both sides, this dispute will likely continue to play out in legislatures and courts—and could end up at the Supreme Court.
Editor’s note: this story was updated after publication to include comment from the Indian Gaming Association.
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