Congress Takes Aim at Prediction Market Sports Bets With Three Bills in Two Weeks
Prediction markets have been in a prolonged legal standoff with state gambling regulators for months, with courts split and the CFTC asserting federal supremacy. Now the fight is moving to Capitol Hill.
Senators Adam Schiff (D-CA) and John Curtis (R-UT) are introducing legislation that would prohibit CFTC-regulated platforms from listing contracts on professional and college sporting events, directly targeting Kalshi and Polymarket’s US sports operations. The bill was reported by the Wall Street Journal and is scheduled to be introduced Monday.
The core argument mirrors what states have been making in court for the past year. Since a 2018 Supreme Court decision, states have held authority to legalise and regulate sports betting within their borders. Prediction market platforms have side-stepped that framework by classifying sports contracts as financial derivatives subject to federal CFTC oversight.
Kalshi has even marketed itself as the “first app for legal sports betting in all 50 states,” including Utah and Hawaii where gambling is constitutionally banned. The Schiff/Curtis bill would close that gap by restricting what CFTC-regulated entities can list, returning sports betting jurisdiction to the states without banning prediction markets in other categories.
Two More Bills in the Same Week
The sports betting bill is the most narrowly targeted of three federal prediction market bills introduced in the past two weeks. Representative Greg Casar and Senator Chris Murphy introduced the BETS OFF Act, Banning Event Trading on Sensitive Operations and Federal Functions, prohibiting wagering on government actions, military operations, assassinations, and acts of terrorism.
Murphy cited unusual betting activity on Polymarket in the hours before US strikes on Iran as evidence of insider trading risk. A third House bill would ban event contracts on elections and government decisions outright while leaving sports contracts to state discretion. All three face resistance from CFTC Chairman Michael Selig, who has defended prediction markets as legitimate financial instruments under federal jurisdiction.
The Competitive Stakes
For Kalshi which is valued at $11 billion, and Polymarket valued at $12 billion, the bills represent a threat to a core revenue stream. Most activity on both platforms revolves around sports.
The American Gaming Association, which represents licensed sportsbooks including FanDuel and DraftKings, has lobbied against prediction markets, arguing they compete with regulated operators while bypassing licensing fees, age verification, responsible gambling requirements, and state taxes.
A bipartisan group of attorneys general from 39 states and Washington DC recently urged a federal court to uphold state authority over sports gambling. Whether Congress can move any of the three bills past the CFTC’s objections, and through a Senate where Donald Trump Jr. serves as a paid adviser to both Kalshi and Polymarket, remains the central open question.
