- Bipartisan US senators move to ban sports betting contracts on regulated prediction platforms.
- Schiff and Curtis warn that prediction markets bypass state laws and expose users to risks.
- US states are struggling with federal regulators over the control of prediction markets.
Sports betting on regulated prediction-market platforms in the US is facing a fresh obstacle after a bipartisan pair of Senators move to introduce legislation banning it on CFTC-regulated platforms, such as Kalshi and Polymarket.
According to reports, US Senators Adam Schiff, a California Democrat, and John Curtis, a Republican from Utah, are set to submit a bill this Monday that will prevent federally regulated prediction-market platforms from offering contracts tied to sports and casino-style games.
Lawmaker Accuses the CFTC of Enabling Prediction Markets
Schiff stated that the CFTC is greenlighting these markets and promoting their growth, arguing that Congress should “eliminate this backdoor, which violates state consumer protections.” Schiff said that the system intrudes upon tribal sovereignty and offers no public revenue.
Schiff’s partner in proposing the bill, Curtis, added that the burgeoning industry is exposing too many young people in Utah to addictive sports betting and casino-style gaming contracts that belong under state control, not federal regulators.
In the meantime, the latest proposal by Schiff and Curtis highlights the ongoing clash between federal regulators, states, and industry participants over how best to govern prediction markets. Although platforms like Kalshi and Polymarket are famous for offering binary contracts across multiple categories, including crypto, politics, weather, and pop culture, they have concentrated their activity around professional and college sports.
An Ongoing Tussle for Regulatory Control
By focusing on sports contracts, prediction markets are in direct competition with traditional sportsbooks, such as FanDuel and DraftKings. Amid the debates, the CFTC maintains that it has exclusive jurisdiction over event contracts in the commodities-derivatives market, having filed a brief in February asserting that states lack regulatory authority over such platforms.
The struggle for regulatory control is ongoing, with Nevada recently securing a temporary restraining order blocking Kalshi from offering contracts tied to sports, elections, and entertainment. Meanwhile, Arizona filed criminal charges against Kalshi, alleging that it operates an unlicensed gambling business. Kalshi disputed the claims, urging Arizona to withdraw the charges.
Related: Wall Street Rushes Into Prediction Markets Amid Iran Tensions
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
