Congress Plays Referee: Senators Launch Bipartisan Bid to Ban Sports Bets from Prediction Markets

US Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah) are cooking up a bipartisan bill to ban sports betting and casino-style contracts on CFTC-regulated prediction markets like Kalshi and Polymarket. This marks the first time senators from both sides of the aisle have teamed up to try to put these platforms on the bench.

The legislation would specifically prohibit listing contracts tied to sporting events and ban "casino-style games" like slot machines, video poker, blackjack, and bingo. Senator Schiff argued, "The CFTC is greenlighting these markets and even promoting their growth. It's time for Congress to step in and eliminate this backdoor," suggesting the agency has been letting the degen culture run wild on the federal field.

Senator Curtis pointed to youth exposure concerns, stating, "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." It’s the classic move of blaming the new, flashy platform instead of the old, entrenched industry—a regulatory tale as old as time.

Sports betting is the main liquidity pump for these platforms. Last week, sports-related contracts made up 47.7% of Polymarket's weekly notional volume and a whopping 78.8% for Kalshi, generating $1.2 billion and $2.6 billion respectively. Turns out, predicting game outcomes is more popular than predicting, well, anything else.

The bill heats up an existing jurisdictional turf war. Prediction market platforms claim their contracts are derivatives under federal CFTC oversight, while state regulators and the American Gaming Association insist sports contracts are just gambling, falling under state and tribal authority. It’s a classic regulatory scramble, with everyone fighting over who gets to hold the whistle.

Regulatory pressure is ramping up outside the Capitol as well. Nevada recently secured a 14-day temporary restraining order blocking Kalshi from offering sports, election, and entertainment contracts. Arizona went even harder, filing criminal charges against Kalshi for allegedly running an unlicensed gambling business. Some states aren't just sending warnings; they're bringing the full legal squad.

Multiple other states, including Massachusetts and Michigan, have also pursued legal action. An Ohio judge recently ruled that Kalshi failed to show the Commodity Exchange Act would necessarily preempt Ohio's sports gambling laws. The state-level resistance is forming a pretty solid defensive line.

Despite the regulatory blitz, Polymarket recently locked in a multiyear partnership with Major League Baseball as its exclusive prediction market exchange partner, gaining access to MLB logos and official data. Even while the senators try to ban the game, Polymarket just got the official jersey.

CFTC Chair Michael Selig has been defending the platforms, calling Arizona's criminal prosecution "wholly inappropriate" and a jurisdictional dispute. The CFTC recently issued a staff advisory classifying event contracts as a "financial asset class." The CFTC seems determined to keep its turf, even if it means arguing over what constitutes a "financial asset" versus a Saturday night bet.

Other legislative efforts are also targeting prediction markets. Senator Chris Murphy and other Democrats previously pushed for the BETS OFF Act to ban wagering on government actions, terrorism, war, and assassination. The regulatory playbook is expanding to cover more than just sports—now even political drama is off the betting menu.

On the international scene, Argentina recently banned Polymarket, citing illegal gambling concerns, following a similar move by Colombia. The global crackdown isn't just a US trend; it's starting to look like a coordinated defensive play across multiple leagues.