A new bill, introduced in the US Senate on Monday, seeks to prohibit prediction markets such as Kalshi and Polymarket from engaging in or publishing transactions associated with sports activities and casino-type games.
This bill, co-sponsored by Senators Adam Schiff, D-Calif., and John Curtis, R-Utah, marks the first bipartisan initiative introduced in the Senate aimed at curbing the expansion of sports betting on platforms like Polymarket and Kalshi. While conventional sports wagering is regulated at the state level, prediction markets operate through a different trading mechanism, utilising futures or commodity contracts that fall under federal jurisdiction.
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The legislation presented on Monday seeks to prohibit any organisation registered with the Commodity Futures Trading Commission (CFTC) from offering or making accessible any “agreement, contract, or transaction relating to any sporting event or athletic competition,” along with outlawing agreements for any casino-themed games such as poker or blackjack.
What is a prediction market?
A prediction market is a platform where you can trade contracts based on the outcome of future events. Unlike traditional stock markets that trade company shares, these markets allow you to "buy" or "sell" positions on real-world occurrences like elections, sports results, economic indicators, or even product launches.
“Sports prediction contracts are sports bets, just with a different name,” Schiff said in a statement announcing the bill's introduction. “These contracts are currently offered in all 50 states in clear violation of state and federal law.”
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“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,” Curtis said in a statement. “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.”
Kalshi tightens norms
Shortly after the legislation was proposed, Kalshi revealed its forthcoming initiatives to prohibit politicians from trading related to their own campaigns and prevent athletes from betting on their own games. The organisation stated that these modifications were in line with recent congressional proposals and CFTC recommendations, and had been under development for several months.
In the past year, prediction markets have skyrocketed in popularity across the United States, hitting over $1.2 billion in total trades on this year's Super Bowl Sunday, while the trading volumes for the entire week exceeded $4.5 billion.
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