This is a first. Even for prediction markets.
According to the Wall Street Journal, a new bipartisan Senate bill is expected to be introduced today by Sen. Adam Schiff (D-Calif.) and Sen. John Curtis (R-Utah). This legislation aims to restrict prediction markets—platforms like Kalshi and Polymarket—that are regulated by the Commodity Futures Trading Commission (CFTC).
This bill marks the first bipartisan Senate effort specifically targeting prediction markets.
It aligns with a surge of recent congressional activity concerning these platforms. Several bills address related issues, such as banning contracts on subjects like war, death, and terrorism (e.g., Schiff's separate DEATH BETS Act), political events, insider trading by officials, or delegating more authority to states.
There's even a restraining order in Nevada.
Key Provisions of the Prediction Market Bill
The legislation is the first bipartisan Senate bill seeking to regulate prediction markets.
- It would prohibit CFTC-regulated entities from listing event contracts (yes/no wagers on future outcomes) tied to sporting events.
- It would also ban casino-style games, including slot machines, video poker, blackjack, and bingo.
The sponsors argue that these markets act as a "backdoor" to gambling, bypassing state-level consumer protections, infringing on tribal sovereignty (particularly relevant to Native American gaming rights), and generating no public revenue—unlike state-regulated sports betting, which often funds education and infrastructure. Sen. Schiff criticized the CFTC for "greenlighting" these markets. Sen. Curtis expressed concerns about youth exposure to addictive betting in states like Utah, where most gambling is banned.
Background on Prediction Markets
Platforms like Kalshi and Polymarket allow users to trade contracts on diverse events, including politics, weather, pop culture, and sports, all under CFTC regulation. Much trading volume is sports-related, competing directly with traditional sportsbooks like FanDuel and DraftKings. This competition has sparked controversy because:
- Traditional sports betting is state-regulated and taxed following the 2018 Supreme Court ruling (Murphy v. NCAA).
- Prediction markets claim to offer financial derivatives/event contracts, not gambling, allowing national access—even in states that prohibit sports betting, like Utah and, in some forms, California.
States and tribes have pushed back through lawsuits and cease-and-desist orders, arguing these platforms undermine state authority and enable unlicensed gambling.
Broader Context of the Bill
The CFTC, under current leadership, has taken a more permissive stance on event contracts, enabling growth but drawing criticism from lawmakers.
States like Utah, California, New York, and Nevada are litigating against these platforms, with courts split on their classification. High trading volumes and partnerships, such as Polymarket's with Dow Jones, have increased scrutiny.
In short, this legislation reflects bipartisan concern that prediction markets are functioning as unregulated sports betting and casino gaming at a federal level, evading state rules. Advancing the bill depends on committee action, broader support, and the ongoing debate over federal versus state authority.
What the Bill Specifically Targets
The "casino-style games" in the bill refer to contracts that prediction market platforms could potentially list under their CFTC-regulated framework.
These are not major active offerings currently on the main platforms, where traditional sports or election markets dominate trading. However, the bill preemptively targets them due to concerns about potential unregulated gambling-like activity.
The prohibition covers contracts related to casino-style games, defined broadly as:
- Slot machines
- Video poker
- Blackjack
- Roulette
- Craps
- Other casino-style table games
- Bingo
- Lottery
- Simulations thereof
The language aims to block event contracts that mimic these games' mechanics or randomness, such as simulated slot spins or virtual blackjack hands.
There's no strong evidence of Kalshi or Polymarket listing high-volume markets for literal casino game simulations. They primarily focus on real-world events, with sports as the main driver of activity.
Relation to Sweepstakes Casinos
The bill does not directly relate to sweepstakes casinos like WOW Vegas or Pulsz, which operate under different legal frameworks. These use promotional sweepstakes rules to offer casino-style games with redeemable prizes but are not CFTC-regulated prediction markets.
The Schiff-Curtis bill focuses specifically on CFTC-regulated entities like prediction exchanges, not sweepstakes or state-licensed platforms. Critics argue that prediction markets could function similarly to unregulated casinos, and the bill aims to prevent such an evolution by banning casino-style games on these platforms.
We'll keep you posted.
