Key Highlights
- Sens. Adam Schiff (D-CA) and John Curtis (R-UT) plan to introduce legislation on Monday that would bar CFTC-regulated prediction market platforms, including Kalshi and Polymarket’s U.S. platform, from listing event contracts tied to sporting events.
- The bill is the first bipartisan Senate effort to directly restrict the prediction market sector’s core revenue stream.
- The legislation arrives amid an escalating clash between federal regulators and states, with Nevada recently securing a temporary restraining order against Kalshi and Arizona filing criminal charges against the platform.
A bipartisan pair of U.S. senators plans to introduce legislation that would bar federally regulated prediction market platforms from offering contracts tied to sports and casino-style games, marking the first such effort in the Senate to directly restrict the fast-growing sector.
Sens. Adam Schiff (D-CA) and John Curtis (R-UT) said the bill would prohibit entities overseen by the Commodity Futures Trading Commission (CFTC), including Kalshi and Polymarket’s U.S. platform, from listing event contracts related to sporting events, the Wall Street Journal reported. The legislation would also extend to casino-style offerings, including slot machine games, video poker, blackjack, and bingo-style markets.
The bill represents a significant escalation in the regulatory battle over prediction markets because it pairs a Democrat with a Republican senator and targets the platforms’ dominant revenue category. Prediction markets process more than $13 billion in transactions each month, with most activity revolving around sports.
First bipartisan senate strike against prediction markets
While at least six bills targeting prediction markets have been introduced in 2026, most have originated in the House and have been led almost exclusively by Democrats. The Schiff-Curtis bill is the first to combine Senate-level authority with genuine bipartisan co-sponsorship, giving it a potentially clearer path through the Republican-controlled chamber.
Schiff argued that the CFTC is “greenlighting these markets and even promoting their growth,” calling on Congress to “step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue.”
Curtis framed the issue around youth exposure, stating that “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 Republican co-sponsorship is particularly notable given the Trump family’s financial ties to the prediction market industry. Donald Trump Jr. serves as a paid adviser to both Kalshi and Polymarket and is an investor in the latter, while Trump Media and Technology Group has announced plans for its own crypto-based prediction platform called Truth Predict.
Rep. Blake Moore, a Utah Republican, has also co-written a House bill seeking to ban prediction market wagers on sports, terrorism, war, and assassinations, meaning Utah Republicans are now leading the charge in both chambers.
The Federal vs. State jurisdiction war
The Schiff-Curtis bill lands in the middle of what has become the defining legal battle in the prediction market sector: whether the CFTC or state gaming regulators have authority over these platforms.
While Kalshi and Polymarket offer yes-or-no wagers tied to everything from politics to the weather to pop culture, much of the trading activity is focused on professional and college sports, putting the platforms in direct competition with licensed betting sites such as FanDuel and DraftKings.
Kalshi has even marketed itself as the “first app for legal sports betting in all 50 states,” even though states have approved and regulated sports gambling since a 2018 Supreme Court decision, and in 11 states, sports gambling remains illegal.
The CFTC under Trump-appointed Chair Michael Selig has aggressively asserted federal supremacy, filing a friend-of-the-court brief in the Ninth U.S. Circuit Court of Appeals in February arguing that it holds exclusive jurisdiction over the commodities-derivatives market, including event contracts.
Selig declared the agency “will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets.” Selig is the sole member of the presidentially appointed commission, which currently has four vacancies.
A bipartisan group of attorneys general from 39 states and the District of Columbia has urged a federal court to uphold state authority to regulate sports gambling, arguing that prediction markets are circumventing the consumer protections, age verification procedures, addiction safeguards, and tax collections that licensed sportsbooks must follow.
States are not waiting for Congress
While the Senate debates legislation, states have already launched an aggressive enforcement campaign. A Nevada state court issued a 14-day temporary restraining order against Kalshi, barring the platform from offering sports, politics, or entertainment contracts to Nevada residents while the case proceeds. The judge rejected Kalshi’s claim that CFTC oversight preempts state authority.
Days earlier, Arizona filed criminal charges against Kalshi’s parent companies, accusing the platform of operating an unlicensed gambling and election wagering operation—the first criminal charges ever brought against the company. Kalshi sent a letter to Arizona’s attorney general imploring the state to withdraw the charges.
The legal battle extends well beyond Nevada and Arizona. Massachusetts and Michigan have separately sued Kalshi, arguing the platform offers illegal sports betting within their borders. Polymarket filed its own lawsuit against Michigan in early March, seeking to preempt the state from enforcing its gambling laws against the platform.
Kalshi, meanwhile, has gone on the offensive, filing preemptive lawsuits against Arizona, Iowa, and Utah to block what it believed were impending bans, arguing that its event contracts fall under federal jurisdiction rather than state authority. In total, officials in at least 11 states have sent cease-and-desist orders to prediction market companies, and litigation is active in at least eight states. The result is a sprawling, multi-front legal war with no clear resolution in sight.
A cascade of Congressional bills in 2026
The Schiff-Curtis bill joins a rapidly expanding legislative pipeline. On March 5, Reps. Blake Moore (R-UT) and Salud Carbajal (D-CA) introduced the Event Contract Enforcement Act in the House, which would require the CFTC to ban contracts on terrorism, assassination, war, sports, elections, and government activity, with a state opt-in provision for sports contracts.
On March 10, Sen. Adam Schiff and Rep. Mike Levin introduced the DEATH BETS Act, which would permanently prohibit CFTC-registered entities from listing contracts tied to war, terrorism, assassination, or death. On March 18, Sen. Chris Murphy and Rep. Greg Casar introduced the BETS OFF Act, targeting contracts on government actions and events where insiders know or control outcomes.
Murphy and Casar pointed to around 150 accounts that placed highly unusual bets on Polymarket the day before U.S. strikes on Iran, with 109 accounts making over $10,000 and one individual netting nearly half a million dollars.
Additional bills from Sen. Richard Blumenthal (Prediction Markets Security and Integrity Act), Sens. Klobuchar and Merkley (End Prediction Market Corruption Act), and Rep. Ritchie Torres (Public Integrity in Financial Prediction Markets Act) round out what has become the most concentrated legislative assault on a single financial sector in years.
Sports leagues walk a fine line
While most U.S. professional sports leagues have broadly embraced legalized sports gambling, some have been more cautious about prediction markets specifically, citing concerns about the platforms’ ability to identify suspicious activity that could expose games to manipulation or insider trading.
MLB, the professional league still reckoning with its biggest betting scandal in decades, recently signed a licensing deal with Polymarket as its official prediction markets platform, granting exclusive access to league data and iconography. Polymarket also agreed to work with MLB to police baseball wagers on its platform. The partnership represents an attempt to bring prediction markets within the integrity frameworks that govern traditional sportsbooks, but whether a single league agreement can substitute for the regulatory infrastructure that states have built around licensed gambling remains an open question.
The industry’s $20B problem
The legislative blitz arrives at a critical moment for prediction market companies. Both Kalshi and Polymarket are in early talks to raise new funding rounds that could value each company near $20 billion, following valuations of roughly half that amount last year. Kalshi’s revenue run rate recently topped $1 billion, while Polymarket processed over $7 billion in volume in February 2026 alone.
But those valuations rest heavily on sports-related contracts. In early 2026, 90% of Kalshi’s volume came from sports contracts, meaning a federal ban on sports event contracts would eviscerate the platform’s dominant revenue stream. The Schiff-Curtis bill, if enacted, would force a fundamental restructuring of the business models that have attracted tens of billions of dollars in investment capital.
The platforms are not without allies. The CFTC recently announced new guidance reminding companies that it is already illegal to offer markets related to assassination, war, or terrorism, while urging companies to avoid markets “readily susceptible to manipulation” — a move critics characterized as self-regulation that allows sports contracts to continue unchallenged.
MLB recently signed Polymarket as its official prediction market exchange, and Polymarket announced an AI-powered monitoring system built with Palantir Technologies to oversee sports market integrity.
But the bipartisan Senate bill from Schiff and Curtis suggests the political window for self-regulation may be closing. With Utah Republicans and California Democrats aligned on the core issue—that sports betting on prediction markets is gambling that belongs under state control—the industry faces the rare prospect of legislative action that neither party’s base is inclined to oppose.
