A bipartisan Senate bill would explicitly bar prediction markets from offering sports and casino-style event contracts, escalating a fast-moving clash between Congress, federal regulators, and states over whether the products are financial derivatives or unlicensed gambling.
Sens. Adam Schiff, D-Calif., and John Curtis, R-Utah, introduced the legislation Monday, targeting what has become the dominant driver of activity on platforms like Kalshi.
Bill targets sports, casino-style contracts
The proposal would amend the Commodity Exchange Act to prohibit any Commodity Futures Trading Commission-regulated platform from listing contracts tied to sporting events or casino-style outcomes.
It also reinforces that federal law should not override state authority to regulate or ban those products, aligning with arguments from state regulators and tribal gaming groups that sports event contracts fall under existing gambling frameworks.
Schiff said the products amount to sports betting “with a different name,” arguing they bypass state consumer protections and taxation while encroaching on tribal exclusivity agreements. His office pointed to more than $100 million traded on a March Madness winner market and over $1 billion on the Super Bowl.
That growth is evident at the platform level. Kalshi has taken over $52 billion in total trading volume since launching sports markets in 2025, with about 86% tied to sports event contracts.
Part of broader congressional push
The bill is the latest step in a widening congressional effort to rein in prediction markets as their offerings expand beyond traditional economic indicators.
Earlier this month, Schiff introduced legislation to ban so-called “death contracts” tied to events such as assassinations or war. Another proposal from Sen. Chris Murphy and Rep. Greg Casar would prohibit contracts tied to military actions, terrorism, and other sensitive outcomes.
Lawmakers have also directly pressured the Commodity Futures Trading Commission. In February, Schiff and more than 20 Senate Democrats urged the agency to reverse course on what they described as the “greenlighting” of sports-related event contracts.
States, CFTC clash over prediction markets
The push from Capitol Hill comes as the CFTC moves in the opposite direction.
The agency has asserted exclusive jurisdiction over prediction markets in federal court, arguing event contracts are derivatives rather than gambling products. It has also begun a formal rulemaking process that could establish the first comprehensive federal framework for the category.
Nevada regulators recently secured a temporary restraining order blocking Kalshi from operating without a state license, with a court finding its contracts fit the definition of a sports pool. Arizona has filed criminal charges, alleging the platform offered illegal gambling products.
More than 30 cases across state and federal courts are now testing whether federal derivatives law preempts state gambling authority, a question that could ultimately reach the U.S. Supreme Court.
