Prediction markets have spent months arguing they are not gambling. Congress is not convinced, and now both sides of the aisle are saying so in writing.
On March 23, Senators Adam Schiff, a Democrat from California, and John Curtis, a Republican from Utah, introduced bipartisan legislation that would prohibit CFTC-regulated platforms from offering contracts tied to sporting events and casino-style games.
The bill directly targets Kalshi and Polymarket’s US platform – the two dominant players in a market that has grown to nearly $20 billion in combined valuation.
Curtis’ involvement is the detail that changes the political calculus. Utah is one of the few states where gambling is banned under the state constitution. His co-sponsorship of a bill targeting the CFTC – a federal regulator under a Republican administration – signals that opposition to prediction market sports betting extends well beyond Democratic critics.
Curtis made his reasoning plain: “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.”
Schiff framed the issue as a regulatory failure: “The CFTC is greenlighting these markets and even promoting their growth,” adding that Congress should “eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue.”
A Market Under Pressure From Every Direction
The proposed legislation does not arrive in isolation. Nevada recently secured a temporary restraining order blocking Kalshi from offering contracts tied to sports, elections, and entertainment.
Arizona filed criminal charges against Kalshi’s parent companies, alleging it operates an unlicensed gambling business, which Kalshi has disputed. Massachusetts, Michigan, and other states have also pursued legal action, while Polymarket filed its own lawsuit against Michigan to prevent enforcement of state gambling laws.
The Ninth Circuit recently denied Kalshi’s emergency request for a stay in a Nevada-related case, a development that could accelerate further state-level action.
Despite the regulatory pressure, both platforms have continued to expand. Kalshi and Polymarket have explored fundraising at valuations of around $20 billion.
Institutional firms including Susquehanna International Group and Jump Trading are active as market makers on Kalshi. Major League Baseball recently signed a licensing deal with Polymarket.
The Core Dispute
The CFTC has argued it holds exclusive jurisdiction over event contracts as part of the commodities-derivatives market. Today’s bipartisan Senate bill is a direct challenge to that position and one of the first times a Republican senator has formally joined that challenge.
Whether Congress moves fast enough to matter is a separate question. The legal battles in state courts will not wait.
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