US Senators Adam Schiff and John Curtis on Monday unveiled the Prediction Markets Are Gambling Act, a bipartisan bill that would prohibit Commodity Futures Trading Commission-registered firms, like Kalshi or Polymarket, from listing sports prediction and casino-style contracts.
Specifically, the proposed legislation seeks to amend the Commodity Exchange Act to ban event contracts linked to sporting events such as professional and collegiate sports as well as games like blackjack, roulette, and lotteries, according to its text.
The proposal would prevent any such agreements from being listed or traded on regulated exchanges and clarifies that federal law would not override existing state-level gambling restrictions.
In a statement, Curtis said the measure seeks to clarify jurisdiction, uphold state control over betting markets, and limit the spread of speculative products in areas he believes are inappropriate.
“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,” the senator said. “The Prediction Markets Are Gambling Act is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.”
Sports-related prediction contracts, now widely available across all 50 states, function as betting products, according to Schiff. He criticized the CFTC for enabling their growth rather than enforcing restrictions.
“Rather than enforcing the law, the CFTC is greenlighting these markets and even promoting their growth. It’s time for Congress to step in and eliminate this backdoor, which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue,” he emphasized.
The bill arrives at a time when prediction markets are growing rapidly.
Combined trading volumes across the sector reached $44 billion in 2025, and industry projections indicate that figure could exceed $50 billion this year. Sports-related activity has driven much of that growth and has become a primary revenue source for the leading platforms.
CFTC moves to block state challenges to prediction markets
Since the 2018 Supreme Court decision that legalized sports betting at the state level, states have built regulatory regimes that generate substantial public revenue and incorporate consumer protections.
Prediction markets, by contrast, operate under federal CFTC oversight as financial instruments rather than gambling products, a distinction that allows them to sidestep state licensing requirements and tax obligations.
States collected billions in sports betting tax revenue in 2025, and the emergence of federally regulated prediction markets offering functionally similar products without contributing to state coffers has drawn sharp objections from governors, state gaming commissions, and tribal nations.
Legal battles are intensifying for Kalshi and Polymarket as states challenge their operations as illegal betting platforms.
With dozens of lawsuits and mixed court rulings, including cases moving forward in Nevada and disputes in Massachusetts, both firms are relying on CFTC oversight as a key defense against state enforcement.
The CFTC has escalated its defense of federal jurisdiction over prediction markets through a new court filing responding to state-level legal challenges.
Chair Michael Selig stated that the agency’s authority, granted by Congress, covers commodity-linked event contracts and should preempt state regulations.
