Senators Adam Schiff (D-CA) and John Curtis (R-UT) have introduced a bill aiming to stop prediction market platforms like Kalshi and Polymarket from allowing users to wager on sports events or play casino-style games. This bipartisan proposal exempts companies like FanDuel and DraftKings, which adhere to state gambling laws rather than federal regulations.
“Sports prediction contracts are essentially sports bets under a different name. They are currently accessible in all states, violating both state and federal laws,” Schiff stated.
Gambling became more widespread after a 2018 Supreme Court ruling allowed states to legalize sports betting. Sports wagers grew from $4.9 billion in 2017 to $121.1 billion in 2023. Most major sports leagues now collaborate with gambling firms, even as some athletes face potential prison for alleged involvement in money laundering conspiracies.
Prediction markets like Kalshi and Polymarket fall under the Commodity Futures Trading Commission (CFTC), allowing federal oversight. However, senators argue the practice of betting via federal or state-regulated platforms is effectively the same. Kalshi’s Super Bowl trading exceeded $1 billion this year, up 2700% from last year.
“Many young people in Utah are exposed to addictive sports betting and casino-style contracts better regulated by the state,” Curtis noted.
Concerns about gambling addiction are substantial. University of California San Diego researchers found online searches for gambling addiction help rose 61% following the availability of online sportsbooks.
Kalshi spokesperson Elisabeth Diana criticized the bill, suggesting it stifles competition and might drive users to offshore markets. Diana added, “It’s obvious this bill is driven by casino interests defending monopolies rather than protecting consumers.” Polymarket did not comment.
Kalshi also faces other legal hurdles, including a temporary ban in Nevada and criminal charges in Arizona.