A bipartisan group of U.S. senators has introduced legislation to prohibit prediction market platforms from offering sports-related contracts, marking the first coordinated effort in Congress to regulate the fast-growing sector.

The bill, led by Adam Schiff and John Curtis, would bar companies regulated by the Commodity Futures Trading Commission from listing contracts tied to sporting events. Platforms such as Kalshi and Polymarket would also be prohibited from offering “casino-style games,” including slot machines, blackjack and video poker.

The proposal comes amid intensifying disputes between federal regulators, state authorities and prediction market operators over how such platforms should be governed.

“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,” Schiff said.

Lawmakers backing the bill argue that sports event contracts function as a form of betting and should fall under state oversight rather than federal commodities regulation.

“Sports prediction contracts are sports bets – just with a different name,” Schiff said, adding “And yet, these contracts have been offered in all 50 states in clear violation of state and federal law.”

Curtis said the legislation was also aimed at limiting exposure to gambling-like products. “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,” he 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,” Curtis added.

The CFTC has maintained that it has exclusive jurisdiction over prediction markets, setting up a clash with several U.S. states that have sought to restrict the platforms. Legal battles have emerged across jurisdictions including Nevada, Arizona, Michigan and Massachusetts, with actions ranging from lawsuits and temporary restraining orders to criminal charges.

Prediction market operators argue they comply with federal law and warn that tighter restrictions could drive users to unregulated offshore venues.

“Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists,” said Elisabeth Diana, a spokesperson for Kalshi. “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.”
The sector has expanded rapidly, with combined trading volumes reaching $18.3 billion in February and major platforms reportedly seeking valuations of around $22 billion.

Traditional betting companies such as DraftKings and FanDuel are increasingly seen as competitors to prediction markets. Shares of DraftKings and Flutter Entertainment rose in premarket trading following news of the bill.

Industry groups welcomed the proposal. The American Gaming Association called it “a critical step in reaffirming Congressional intent that all gaming, including sports betting, is not a federal commodity, and is governed by state and tribal law.”

“The AGA strongly supports this bipartisan effort… to uphold state and tribal sovereignty and protect consumers by ensuring sports and gambling-related contracts are prohibited,” the group said.

The legislation is part of a broader wave of proposals in Congress targeting prediction markets, including measures aimed at restricting contracts tied to government actions and other sensitive events.

Sports leagues have taken mixed positions. While some have raised concerns about integrity risks, Major League Baseball recently partnered with Polymarket, underscoring the growing intersection between professional sports and prediction platforms.

* The full text of the bill is available here.