In a significant legislative move to rein in the rapidly expanding prediction market industry, a bipartisan duo in the US Senate has introduced a new bill aimed at stopping platforms like Kalshi and Polymarket from offering contracts tied to sports or casino-style games.
The proposal, titled the Prediction Markets Are Gambling Act, marks a historic first as lawmakers from both sides of the aisle join forces in the chamber to specifically target the intersection of financial speculation and traditional gambling.
Co-sponsored by Senator Adam Schiff (D-CA) and Senator John Curtis (R-UT), the bill seeks to close what proponents call a “backdoor” that allows unregulated wagering under the guise of financial derivatives. The legislation specifically targets any company registered with the Commodity Futures Trading Commission (CFTC), barring them from listing contracts linked to athletic competitions or classic casino games such as poker, blackjack, roulette, or slots.
Closing the “Backdoor” to Unregulated Gambling
Senator Schiff was direct in his assessment of the current state of these platforms during the bill’s introduction. “Sports prediction contracts are sports bets, just with a different name,” Schiff stated. “These contracts are currently offered in all fifty states in clear violation of state and federal law.” Lawmakers argue that without federal intervention, these platforms will eventually slide into the role of full-scale online casinos, bypassing state-level consumer protections and tax obligations.
The act does not seek to shut down prediction platforms entirely; instead, it looks to restrict them from offering specific bets that fall under existing state gambling definitions. “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 added.
“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.”
A Growing Wave of Anti-Prediction Market Legislation
This US Senate bill is the latest in a series of measures introduced in Congress this year to tighten oversight of the industry. Earlier this month, Senator Chris Murphy and Representative Greg Casar unveiled the BETS OFF Act, which focuses on blocking contracts tied to sensitive government and military decisions. This follows controversial trades where users profited from geopolitical crises, such as military strikes in the Middle East and the abduction of foreign leaders.
Other senators have also entered the fray: Richard Blumenthal has proposed strict consumer protections, including mandatory age checks and advertising limits, while Senators Jeff Merkley and Amy Klobuchar are pushing to ban elected officials from profiting through these markets.
Additionally, Rahm Emanuel has proposed extending such bans to include federal employees and their immediate families. As prediction markets become more mainstream, the bipartisan consensus in Washington appears to be shifting toward a much more restrictive regulatory environment.
