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A bipartisan Senate duo is introducing legislation that would prohibit prediction markets like Kalshi and Polymarket from letting people bet on sports and casino-style games.
The bill set to be introduced Monday would bar any entity registered with the Commodity Futures Trading Commission from listing or facilitating transactions linked to sporting events or athletic competitions. It would also prohibit bets tied to casino-style games, including poker and blackjack.
The legislation, co-sponsored by Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah), marks the first Senate effort to address the rapid growth of sports-linked trading on platforms that operate outside traditional state-regulated gambling frameworks.
It comes after Arizona’s attorney general last week filed criminal charges against Kalshi accusing it of operating an illegal gambling business.
The platform rejected the allegations as based on “paper-thin arguments.”
“States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it,” Kalshi fired back.
Last Thursday, Major League Baseball announced a new partnership with Polymarket and the CFTC to establish guidelines aimed at managing risk while enhancing fan engagement.
Schiff took aim at jargon used by the prediction markets, which often refer to bets as “contracts.”
“Sports prediction contracts are sports bets — just with a different name,” he said in a statement.
“And yet, these contracts have been offered in all fifty states in clear violation of state and federal law. Rather than enforce the law, the CFTC is greenlighting these markets and even promoting their growth. It’s time for Congress to step in.”
Kalshi said the bill would have adverse consequences.
“Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists,” spokesperson Elisabeth Diana told The Post in a statement. “It’s clear this bill is motivated by casino interests that are threatened by competition.”
The CFTC didn’t immediately respond to a request for comment.
While sports betting is typically overseen at the state level, prediction markets use financial instruments such as futures and commodity contracts, placing them under federal jurisdiction. Recent months have seen lawmakers, state governments and federal regulators debate about who should have oversight of event and sports contracts on prediction platforms.
Prediction markets have grown rapidly in the US over the past year, with trading volumes exceeding $1.2 billion during this year’s Super Bowl and surpassing $4.5 billion for the week, according to industry estimates.
“Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators,” said Curtis.
The prediction markets sector has faced increased scrutiny this year. Allegations of insider trading and concerns over the use of the platforms relating to sensitive geopolitical events like the January raid on Venezuela have raised regulatory and national security questions.
Both Kalshi and Polymarket have faced criticism for allowing bets related to the Iran war. Earlier this month, bettors on Polymarket allegedly made death threats to an Israeli reporter as they pressured him to change an article he wrote about an Iranian missile strike.