Senators Adam Schiff (D-CA) and John Curtis (R-UT) introduced a bill on Monday that could prevent prediction market platforms Kalshi and Polymarket from allowing users to wager money on sports events or play casino-style games.
This bipartisan bill would not apply to FanDuel and DraftKings, which are subject to state-by-state gambling laws, rather than federal ones.
“Sports prediction contracts are sports bets — just with a different name. And yet, these contracts are currently offered in all fifty states in clear violation of state and federal law,” Schiff said in a statement.
Gambling has become more prominent in American culture after a 2018 Supreme Court decision that made it possible for states to legalize sports betting. Total sports wagers grew from $4.9 billion in 2017 to $121.1 billion in 2023. Most major professional sports leagues now have contracts with gambling companies, even as star athletes face possible prison time for their alleged roles in money laundering conspiracies.
Prediction markets like Kalshi and Polymarket are regulated under the Commodity Futures Trading Commission (CFTC), which is why Schiff and Curtis are able to address them under federal jurisdiction, rather than leaving them to state-regulated sportsbooks. But these senators argue that there isn’t much of a difference in practice between betting on sports via federally- or state-regulated apps. Kalshi’s Super Bowl trading volume, for instance, reached over $1 billion this year — a 2700% increase year-over-year.
“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,” Curtis said in a statement.
Curtis’s concerns about gambling addiction are legitimate. Researchers at the University of California San Diego’s Qualcomm Institute and School of Medicine analyzed online search query data and found that when online sportsbooks became available, searches for help with gambling addiction increased by 61% and have continued growing since.
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Kalshi spokesperson Elisabeth Diana told TechCrunch that this bill would stifle competition and push users to offshore prediction markets.
“It’s clear this bill is motivated by casino interests that are threatened by competition. They’re more worried about protecting their monopolies than protecting consumers,” Diana said.
Polymarket did not respond to a request for comment.
Kalshi has faced other legal challenges recently — the app is temporarily banned in Nevada and is facing criminal charges in Arizona.
Source: techcrunch.com
