Bipartisan Bill Targets Sports-Focused Prediction Markets, Citing Gambling Concerns
In an era of deep political division, a new legislative proposal in Washington, D.C., is finding uncommon ground. A bill introduced in the U.S. Senate with co-sponsorship from a Republican and a Democrat seeks to sharply restrict a fast-growing segment of the financial prediction market industry: sports-related contracts.
The “Prediction Markets Are Gambling Act”
The legislation, formally titled the Prediction Markets Are Gambling Act, was introduced by Senator John Curtis (R-Utah) and Senator Adam Schiff (D-California). Its central aim is to prohibit the Commodity Futures Trading Commission (CFTC) from allowing any registered entity to list prediction contracts that the bill defines as closely resembling a traditional sports bet or a casino-style game.
If enacted, the law would represent a significant legislative check on the CFTC’s recent regulatory approach. For approximately fifteen years, the CFTC had enforced a policy against listing contracts involving “gaming.” However, the agency has recently signaled a shift, moving to relax that enforcement and pursuing partnerships—such as a recent agreement with Major League Baseball—to oversee certain sports-related prediction markets.
Potential Impact on Major Platforms
The bill would directly challenge the business models of leading prediction market operators. For Kalshi, a prominent CFTC-regulated platform, sports event contracts constitute an estimated 90% of its total trading volume. Similarly, the integration of sports prediction contracts has been a key growth driver for retail brokerage giant Robinhood. The proposed law would force these platforms to either dismantle these popular offerings or risk regulatory sanction.
The scale of this market is substantial. Trading volume on major sports events has surged, with contracts on the NCAA Men’s Basketball Tournament (March Madness) already exceeding $100 million in volume for a single event, and Super Bowl-related trading on prediction markets surpassing $1 billion in 2026, according to industry data cited in the bill’s findings.
Senators’ Arguments: State Authority and Consumer Protection
In a statement on his official website, Senator Schiff framed the issue as one of legal enforcement and consumer protection. “Sports prediction contracts are sports bets — just with a different name. 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 and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue.“
Senator Curtis focused on state regulatory authority and social concerns, stating, “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. Our bipartisan legislation clarifies regulatory jurisdiction, ensuring that states can maintain their authority over sports betting and casino gaming. The Prediction Markets Are Gambling Act is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.“
The Core Dispute: Gambling or Financial Product?
The crux of the legislative and regulatory battle is classification. Proponents of the CFTC’s current approach argue that certain prediction contracts are legitimate financial derivatives that hedge real-world economic risks. The Senators and critics counter that sports outcome contracts are functionally indistinguishable from gambling. They note these contracts are currently listed in all 50 states, including jurisdictions like Utah, where all gambling is prohibited, and California, where most casino-style gaming and sports betting are banned under the state constitution.
Critics argue this creates a regulatory loophole, allowing platforms to operate outside the strict consumer protections, licensing requirements, and tax structures that apply to state-licensed sportsbooks. Furthermore, they contend these markets undermine the regulatory authority of tribal gaming commissions, which hold sovereign power in many states.
Next Steps and Industry Response
The bill now moves to committee for consideration. Its fate will depend on the outcome of debates over regulatory jurisdiction, the definition of gambling versus legitimate financial hedging, and the role of federal versus state authority. Industry actors like Kalshi and Polymarket have previously defended their models as innovative financial tools that provide valuable economic signals.
This bipartisan effort highlights a rare point of alignment between lawmakers from opposite ends of the political spectrum, unified by a shared concern that the CFTC’s evolving stance on prediction markets is inadvertently legalizing a form of widespread, online sports betting that bypasses the established legal and regulatory frameworks of the states.
