US lawmakers are preparing new legislation aimed at restricting sports betting activity on prediction market platforms, as regulatory pressure on the sector continues to build.
According to a Wall Street Journal report, Senators Adam Schiff and John Curtis plan to introduce a bipartisan bill that would prohibit sports betting and “casino-style” contracts on platforms regulated by the Commodity Futures Trading Commission (CFTC).
Curtis said the proposal is driven by concerns over gambling exposure.
“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,”
Focus shifts to prediction market contracts
The proposed bill would directly target one of the fastest-growing segments of prediction markets. These platforms allow users to trade contracts tied to real-world outcomes, including sports events, elections, and economic indicators.
This follows increased scrutiny in Washington, particularly after concerns emerged around contracts linked to geopolitical events. Earlier this month, Schiff introduced the DEATH BETS Act, which seeks to ban contracts tied to war, terrorism, assassination, and individual deaths.
“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.” Schiff addressed this before.
Weekly trading volumes reached approximately $1.2 billion on Polymarket and $2.6 billion on Kalshi, based on the same dataset.
Federal and state authority remains contested
At the regulatory level, questions around jurisdiction remain unresolved. On March 12, the CFTC issued guidance classifying event contracts as a financial asset class and opened a public consultation on how existing commodities law applies to prediction markets.
Polymarket and Kalshi currently operate under CFTC oversight as designated contract markets. However, recent legal challenges suggest that state regulators may still have authority over certain types of contracts.
In a March 9 ruling, an Ohio judge said Kalshi had not demonstrated that federal law overrides state gambling regulations. More recently, a Nevada court temporarily blocked the platform from offering certain event contracts, siding with state regulators who argued the products fall under local gambling laws.
The proposed Senate bill would add a legislative layer to these ongoing disputes, focusing specifically on sports and casino-style contracts within federally regulated markets.
Oleksii Shumak
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that, despite the nature of much of the material created and hosted on this website, HODL FM operates as a media and informational platform, not a provider of financial advisory services. The opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice, HODL FM strongly recommends contacting a qualified industry professional.
