US Bipartisan Senators Join Forces! Propose Legislation to Ban "Prediction Market" Sports Betting

According to The Wall Street Journal, U.S. bipartisan senators will introduce a new bill on Monday to ban federally regulated prediction market platforms from offering contracts related to “sports events” and “casino-style games,” marking the first attempt by the U.S. Senate to restrict the rapidly expanding prediction markets.

The bill is sponsored by Democratic Senator Adam Schiff and Republican Senator John Curtis, advocating for a complete ban on prediction markets regulated by the U.S. Commodity Futures Trading Commission (CFTC)—including platforms like Kalshi and Polymarket—on any contracts related to sports events.

Furthermore, the ban would extend to so-called “casino-style products,” including slot machines, blackjack, poker, and bingo-related prediction markets.

Adam Schiff stated, “The U.S. CFTC not only greenlights these markets but also promotes their development.” He believes Congress should eliminate this regulatory loophole, which “violates state consumer protection laws, infringes on tribal sovereignty, and contributes nothing to government revenue.”

John Curtis added, “In Utah, too many young people are exposed to addictive sports betting and casino-style game contracts, which should be regulated by state governments, not federal agencies.”

The introduction of this legislative proposal comes amid escalating disputes over the regulatory authority over prediction markets among U.S. regulators, state governments, and industry players.

Although platforms like Kalshi and Polymarket offer binary contracts—derivative financial products where participants bet on specific event outcomes with only “yes” or “no” results—covering various fields such as cryptocurrencies, political elections, climate change, and pop culture, most trading activity remains heavily concentrated on sports events. This has led to fierce competition with traditional sports betting giants like FanDuel and DraftKings.

The CFTC maintains that event contracts are inherently part of the derivatives market and thus fall under its exclusive jurisdiction. In legal filings this February, the CFTC stated that state governments have no authority to regulate prediction market platforms.

However, state governments are fighting back. Nevada recently obtained a temporary restraining order to block Kalshi from offering prediction contracts related to sports, elections, and entertainment. Arizona has even filed criminal charges against Kalshi’s parent company, accusing it of operating an illegal gambling business without a license. In response, Kalshi strongly denied these allegations and urged Arizona to withdraw the lawsuit.

This legal tug-of-war has now spread across multiple jurisdictions in the U.S. Massachusetts and Michigan have filed lawsuits against Kalshi; to protect itself, Polymarket also recently sued Michigan to challenge the state’s strict gambling regulations. Additionally, the U.S. Ninth Circuit Court of Appeals recently rejected Kalshi’s emergency motion to stay enforcement of the Nevada case, effectively paving the way for further bans by other states.

Despite regulatory uncertainties, the prediction market sector continues to attract capital. Reports suggest Kalshi and Polymarket are seeking funding at a valuation of $20 billion. Major Wall Street firms like Susquehanna and Jump Trading are acting as market makers for Kalshi, and financial data provider Tradeweb has begun data collaborations with the platform.