Bill introduced seeks to ban sports bets on prediction markets

Key Points:

• A bipartisan Senate bill titled "The Prediction Markets Are Gambling Act," introduced by Sens. John Curtis (R-Utah) and Adam Schiff (D-California), aims to ban prediction markets from offering sports and casino-style event contracts, clarifying regulatory authority between states and the federal Commodity Futures Trading Commission (CFTC).
• The bill comes amid increasing state-level crackdowns on prediction markets, including a temporary court injunction against Kalshi in Nevada and criminal charges filed against the company in Arizona for illegal sports betting.
• Kalshi and its co-founder Tarek Mansour argue that prediction market contracts are commodity market swaps regulated federally by the CFTC, but several states contend these contracts constitute gambling subject to state laws.
• Despite legal challenges, prediction markets are expanding, with Major League Baseball partnering with Polymarket and Kalshi securing $1 billion in new funding; Kalshi also announced new measures to prevent insider trading and market manipulation.
• The regulatory dispute highlights tensions between federal and state jurisdictions over prediction markets, with industry players warning that restrictive laws could drive activity offshore, reducing consumer protections.