Senators Introduce Bipartisan Bill To Ban Sports Betting On Prediction Markets

A caller measure introduced successful nan Senate Monday would prohibition prediction markets for illustration Kalshi and Polymarket from accepting aliases listing transactions related to sports events and casino-style games.

The bill, co-sponsored by Senator Adam Schiff, D-Calif., and John Curtis, R-Utah, is nan first bipartisan authorities introduced successful nan Senate targeting nan emergence of sports betting connected services for illustration Polymarket and Kalshi. While accepted sports gambling is regulated by states, prediction markets utilize a different method trading mechanism, via futures aliases commodity contracts, that autumn nether national oversight.

“Sports prediction contracts are sports bets — conscionable pinch a different name,” said Sen. Schiff successful a connection announcing nan bill’s introduction. “These contracts are presently offered successful each 50 states successful clear usurpation of authorities and national law.”

“It’s clip for Congress to measurement successful and destruct this backdoor which violates authorities user protections, intrudes upon tribal sovereignty, and offers nary nationalist revenue,” Schiff said.

Created successful 1974, nan Commodity Futures Trading Commission has nan exclusive right nether nan national Commodity Exchange Act to modulate futures, options, and swaps for registered commodities entities. Several prediction markets, for illustration Kalshi and Polymarket, person registered pinch nan CFTC arsenic a type of derivative speech called a designated statement market.

The caller measure would prohibition immoderate entity registered pinch nan CFTC from listing aliases making disposable immoderate “agreement, contract, aliases transaction relating to immoderate sporting arena aliases diversion competition,” successful summation to banning akin contracts for immoderate casino-style crippled for illustration poker aliases blackjack.

“Too galore young group successful Utah are getting exposed to addictive sports betting and casino-style gaming contracts that beryllium nether authorities control, not nether national regulators,” Sen. Curtis said successful a statement. “The Prediction Markets Are Gambling Act is astir respecting states’ authority, protecting families, and keeping speculative financial products retired of spaces wherever they don’t belong.”

Prediction markets person soared successful fame complete nan past twelvemonth successful nan United States, seeing complete $1.2 cardinal successful full trading during this year’s Super Bowl Sunday, pinch trading volumes for nan full week soaring past $4.5 billion.

The prediction marketplace companies are basking commodities themselves. Last week, The Wall Street Journal reported, citing respective unnamed sources, that Kalshi had secured a $22 cardinal valuation successful its latest information of task superior funding, while rival Polymarket is reportedly hoping to attain a akin valuation.

Both services person been jockeying for users’ attraction and wallets, opening free market stores and trading-themed bars to lure successful imaginable clients.

However, nan services person besides attracted mounting scrutiny complete insider trading allegations successful sports and different arenas. Leading AI institution OpenAI fired an employee complete allegations nan individual had placed bets connected Polymarket tied to beforehand knowledge of nan company’s merchandise announcements, while bets connected nan decease of Iran’s Ayatollah Ali Khamenei highlighted nan usage of prediction markets successful warfare and raised questions astir nationalist information risks.

On Thursday, Major League Baseball announced a caller partnership pinch Polymarket and nan CFTC “to create clear boundaries pinch nan extremity of mitigating consequence while providing instrumentality engagement opportunities.”