US Senators Adam Schiff and John Curtis are preparing to introduce bipartisan legislation that would prohibit sports betting and casino-style gaming contracts on federally regulated prediction markets. The bill follows heightened congressional scrutiny and legal challenges over whether these markets fall under state gambling laws or federal commodity regulations. Data shows sports betting drives the majority of trading volume on platforms like Polymarket and Kalshi.
A bipartisan bill expected from US Senators Adam Schiff and John Curtis would ban sports betting and “casino-style” contracts on Commodity Futures Trading Commission-regulated prediction markets. “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,” Senator Curtis stated.
This new measure adds to a widening Washington push against certain prediction market contracts. On March 10, Schiff separately introduced the DEATH BETS Act, which seeks to prohibit contracts tied to war, terrorism, and assassination.
Sports betting is a leading source of trading activity on major prediction market platforms. Sports-related contracts accounted for 47.7% of Polymarket’s weekly notional volume and 78.8% for Kalshi last week, according to Dune data.
In dollars, sports betting generated about $1.2 billion in weekly notional trading volume for Polymarket and $2.6 billion for Kalshi. The regulatory pressure has intensified both in Congress and from federal and state authorities.
On March 12, the CFTC issued a staff advisory classifying event contracts as a “financial asset class.” The regulator also asked for public feedback on how the Commodity Exchange Act applies to prediction markets.
However, state courts have recently challenged the CFTC’s asserted authority over these markets. An Ohio judge ruled that Kalshi failed to show the Commodity Exchange Act would preempt Ohio’s sports gambling laws.
Furthermore, a Nevada judge temporarily blocked Kalshi from offering sports, election, and entertainment contracts in the state for 14 days. The judge found state regulators were reasonably likely to succeed in arguing the markets violated Nevada gambling law.
