US Senators Push Ban on Sports Prediction Markets

Two U.S. lawmakers have introduced bipartisan legislation seeking to restrict prediction market platforms from offering contracts linked to sports outcomes and casino-style activities. The proposal follows growing debate over whether these products fall under financial regulation or should be treated as gambling.

The bill, named the Prediction Markets Are Gambling Act, was introduced by Senators Adam Schiff and John Curtis. It aims to limit the ability of companies regulated by the Commodity Futures Trading Commission to list contracts that resemble traditional betting products. Lawmakers intend for the measure to redefine how such offerings are categorized under federal law while reinforcing the authority of state-level gambling oversight.

Lawmakers Seek to Redefine Market Boundaries

Supporters of the legislation argue that prediction market contracts tied to sports events function similarly to conventional sports betting. They contend that the current regulatory framework allows these platforms to operate nationwide without adhering to state gambling laws.

Schiff addressed this concern directly, stating, “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.” He further added, “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.”

The proposed law would prevent CFTC-regulated platforms from offering contracts linked to sports competitions or casino-style games. Curtis emphasized concerns about accessibility, particularly among younger individuals, saying, “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.”

Legal Conflicts Highlight Regulatory Uncertainty

The introduction of the bill comes as disagreements persist over how prediction markets should be classified. Operators maintain that their products are financial instruments similar to commodity derivatives, while several states have taken the position that they effectively constitute gambling.

Recent enforcement actions reflect these differing interpretations. In Arizona, prosecutors filed a 20-count complaint against a platform accused of facilitating illegal wagers tied to sports and elections. Meanwhile, a court in Nevada issued a temporary restraining order preventing similar offerings.

Arizona Attorney General Kristin Mayes criticized one operator’s approach, stating, “Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law.”

These developments illustrate the ongoing tension between federal oversight and state enforcement efforts, with each side asserting authority over how such platforms should operate.

Rapid Expansion Draws Industry and Political Attention

Prediction markets have experienced significant growth, particularly around major sporting events. Contracts tied to the NCAA basketball tournament, commonly known as March Madness, exceeded $100 million in trading volume, while activity linked to the Super Bowl surpassed $1 billion in 2026.

Industry representatives continue to defend their model, arguing that these markets provide a regulated alternative to unlicensed betting. Tarek Mansour criticized the legislative effort, describing it as the “casino lobby hard at work. … Banning just pushes this offshore, where no regulation exists. This bill isn’t about protecting consumers; it’s about protecting monopolies.”

Platforms have also introduced measures aimed at addressing integrity concerns. One operator stated, “Individuals involved in college and professional sports (including athletes, personnel, and referees) will be preemptively blocked from trading markets associated with sports they are involved in.”

As discussions continue in Washington and across state governments, the classification and regulation of prediction markets remain unresolved. Ongoing legal actions and legislative proposals are expected to play a central role in determining how these platforms operate in the United States.

Source:

US Senators Move to Ban Sports Prediction Markets, realmoneyaction.com, March 25, 2026