US Senators Propose National Ban on Sports Betting via Prediction Markets

Quick Summary

• Bipartisan US Senate bill would ban sports wagering on prediction market platforms.
• Legislation specifically targets firms overseen by the Commodity Futures Trading Commission (CFTC).
• Move comes as prediction markets see rapid growth and overlap with regulated sports betting.
• Federal action aims to resolve regulatory gray areas and address integrity concerns.

What Happened

On March 24, 2026, a group of bipartisan US senators introduced landmark legislation seeking to prohibit prediction market platforms from offering contracts tied to sporting events. The bill, spearheaded by Representatives Adam Schiff (D-CA) and John Curtis (R-UT), represents the first concerted legislative effort in Congress to draw a clear line between speculative trading and conventional sports betting.

The proposed law would mandate the Commodity Futures Trading Commission (CFTC)—the primary federal regulatory body for such markets—to deny or revoke approval for any prediction market contracts based on the occurrence or outcome of athletic contests. This includes both collegiate and professional sports, intensifying oversight over a sector whose boundaries with legal sports betting have become increasingly blurred.

Why It Matters

The introduction of this federal bill marks a significant pivot for US gambling and trading regulation, potentially reshaping how Americans interact with emerging financial prediction platforms. Incorporating sports-related outcome contracts into the CFTC’s remit has long been a contentious issue. The overlap between regulated sports betting (now legal in more than 30 states) and unregulated prediction markets has stoked industry and political debate.

Platforms such as Kalshi and Polymarket, which enable users to trade outcomes on a wide array of events—including political elections, economic indicators, and, to a limited extent, sports—have grown rapidly in popularity. Their defenders argue that they represent a new class of informational markets, distinct from gambling. Critics—including traditional sportsbook operators and many state regulators—counter that these platforms often circumvent state betting laws and create loopholes for untaxed and unlicensed gambling activity.

If enacted, this legislation would close what lawmakers see as a regulatory gap, explicitly outlawing sports wagering via prediction markets regardless of user intent or market structure. This addresses persistent concerns over consumer protection (especially for underage or at-risk bettors) and reinforces the integrity measures put in place by state-licensed operators.

Moreover, the move sends a strong federal signal about the limits of commoditizing intangible real-world events, a crucial issue as both the prediction market and online sports betting sectors continue to innovate at pace. As these industries attract billions in handle and millions in new users, defining the boundary between acceptable financial speculation and traditional gambling has become a policy touchstone—one with broad implications for taxation, advertising, and consumer safeguards.

Industry Context

This attempt at federal intervention comes amid rising scrutiny on prediction market platforms’ expanding role in the US gambling ecosystem. Companies like Kalshi and PredictIt have sought to classify themselves as exchanges for “event contracts,” securing CFTC designations to sidestep state-by-state gaming regulation. Some have begun testing the limits by introducing sports-related contracts, prompting pushback from both traditional gambling interests and established financial regulators.

The CFTC itself has variably restricted sports-based contracts, blocking specific applications on concerns around game integrity, manipulation risk, and the potential to undermine local gambling frameworks. The American Gaming Association (AGA) and multiple state gaming boards have previously called for tighter federal oversight of these platforms, arguing that lax regulation threatens both consumer safety and established gaming industry norms.

At the same time, prediction markets offer unique economic and informational benefits, including low-cost “insurance” against real-world uncertainty and improved price discovery for future events. The sector’s supporters warn that outright prohibitions may stifle innovation and push users toward unregulated offshore platforms, a risk highlighted in ongoing discussions about casino regulation and market oversight.

Regulatory Background

Since the 2018 repeal of PASPA (Professional and Amateur Sports Protection Act), legal sports betting in the US has operated under a patchwork of state laws, with federal oversight largely limited to anti-money laundering provisions and interstate wagering bans. Prediction markets, by contrast, have operated primarily under the CFTC’s Commodity Exchange Act, with little consistency in what kinds of contracts (especially event-based ones) are allowed.

To date, the CFTC has approved certain event contracts for public benefit but maintained broad discretion to deny markets it views as “gaming” or not in the public interest. Its 2023 rejection of a major application to list political and sports contracts—and subsequent lawsuits—highlighted the urgent need for legislative clarity.

This new Senate bill seeks to eliminate ambiguity by imposing a categorical ban on all contracts related to sports outcomes within the prediction market sector, closing potential loopholes and clarifying both state and federal regulatory roles.

What Happens Next

The bill will proceed through committee review in both chambers of Congress. If it passes legislative hurdles, it could force major prediction market platforms to terminate all existing and planned sports markets nationwide, regardless of state law. Industry stakeholders, including both prediction market operators and regulated sportsbooks, are expected to lobby intensively as the measure advances, with continued debate around the definition and treatment of “event contracts” likely to shape future regulatory reforms.

Sources

• Yogonet - Legislation

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