Lead brief
US Senator Brian Schatz has announced federal legislation aimed at banning micro prop bets and empowering the FTC against companies facilitating payments to illegal offshore gambling sites, marking a potential turning point in US sports betting regulation.
Coverage frame
This piece sits inside the wider 31Casino news desk, where single developments are read against regulation, market structure, and reader relevance.
Primary source base
- ▸US Sen. Brian Schatz is preparing legislation to outlaw micro prop bets across all states.
- ▸The Federal Trade Commission would receive new authority to pursue companies facilitating illegal offshore gambling payments.
- ▸The proposal was outlined in a recent Senate Commerce subcommittee hearing.
- ▸The move comes amid growing concerns over offshore operators and bet types seen as high-risk for integrity and consumers.
What Happened
At a pivotal Capitol Hill hearing on sports betting on May 28, 2026, Senator Brian Schatz (D-HI) announced plans to introduce federal legislation targeting two core issues in US gambling regulation. Firstly, the proposed bill seeks to ban "micro prop" bets—wagers placed on highly specific, often in-game events such as the outcome of the next pitch or play—citing integrity and consumer protection concerns. Secondly, the legislation would empower the Federal Trade Commission (FTC) to intervene against companies (including payment processors) that knowingly facilitate transactions linked to illegal offshore gambling operators.
These proposals were unveiled during a Senate Commerce subcommittee session dedicated to evaluating the impact of rapidly expanding sports betting markets. Lawmakers and industry experts underlined challenges faced by the US regulatory model, particularly regarding gaps exploited by unlicensed offshore platforms and the proliferation of risky new bet types.
Why It Matters
Senator Schatz's initiative stands to reshape the trajectory of US sports betting policy at the federal level. Since the Supreme Court struck down PASPA in 2018, legal jurisdiction over sports betting has largely been left to individual states. This has led to a patchwork of laws and regulations, some of which explicitly permit prop bets and dynamic wagering, while others ban or restrict them. Federal intervention could usher in new restrictions that override state-level liberties on bet types and enforcement approaches.
The focus on micro prop bets is especially significant. These wagers are designed to maximize engagement by allowing bets not just on match outcomes, but on granular, real-time events within a game. Critics argue this heightens risk of problematic gambling behaviors, while also increasing susceptibility to match manipulation.
Micro prop betting — a category that has drawn considerable scrutiny from regulators due to its potential links to integrity risks and increased incidence of problem gambling.
By proposing FTC enforcement powers against payment facilitators handling transactions for offshore gambling sites, Schatz aims to combat the persistent challenge of illegal betting markets funneling US consumer funds overseas. Payment blocking is widely regarded as one of the few tools available to throttle the flow of money to unlicensed operators, who often operate outside any responsible gambling framework.
Industry Context
The US sports betting industry has seen explosive growth, but concerns over market integrity and the reach of illegal operators remain. According to the American Gaming Association, legal sports betting handle surpassed $120 billion in 2025, yet the volume of bets placed with offshore bookmakers remains difficult to estimate. The prevalence of user-friendly apps and diverse betting markets has intensified the competitive pressure on licensed operators, incentivizing them to innovate with new bet types like micro props.
At the same time, enforcement against offshore providers remains patchy. While individual states have occasionally blacklisted payment processors and taken civil action against illegal sites, interstate differences have limited cohesive action. The proposed move to federally empower the FTC puts the federal government on more aggressive footing, echoing the earlier era of the Unlawful Internet Gambling Enforcement Act (UIGEA) but with broader mandates for consumer protection and payment oversight.
The scrutiny of micro prop bets also aligns the US with evolving European debates about in-play and granular betting structures. Jurisdictions like the UK and Australia have grappled with similar questions as they refine responsible gambling and sports integrity safeguards.
Regulatory Background
US gambling policy has been defined by a state-first approach since the fall of PASPA, resulting in a diverse landscape. Some jurisdictions, including Nevada and New Jersey, have developed sophisticated oversight models with varying restrictions on prop betting. Others lag behind, leaving regulatory vacuums that can be exploited by unlicensed operators.
Efforts to curtail payment flows to offshore sites date back to the 2006 UIGEA, which compelled banks and payment providers to block transactions linked to illegal online gambling. However, UIGEA has often proven difficult to enforce consistently, particularly as new payment technologies (including cryptocurrencies) have emerged. Senator Schatz’s proposal to grant explicit powers to the FTC reflects a recognition that the old frameworks may no longer be adequate for today's digital sports betting market.
For readers seeking technical specifics on payments and regulatory models, our payment methods guide and casino regulation guide provide detailed overviews.
What Happens Next
Senator Schatz is expected to formally introduce the bill in the coming weeks. The proposed legislation will then be subject to committee hearings, amendments, and potentially a full Senate vote. Should the bill advance, it could spur considerable debate among state regulators, industry stakeholders, and responsible gambling advocates, as its provisions may preempt certain forms of legal betting currently permitted in US states.
Sources
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