Bipartisan Senate bill would ban sports betting on online prediction markets | US Senate
Prediction markets face new bipartisan scrutiny in the US Senate as companies like Kalshi and Polymarket continue to fight state-led efforts to regulate online betting.
A bill was introduced in the U.S. Senate on Monday that would ban federally regulated platforms from allowing betting on sporting events; This would be a major blow to markets where billions of dollars are traded during major events like the Super Bowl and the NCAA’s March Madness.
The bill follows several other state-level efforts to regulate marketplaces that are overseen by a federal agency. On Friday, a Nevada judge temporarily banned Most of Kalshi’s operations in the state occurred during the two weeks after the state filed a lawsuit against the company.
Online prediction markets are currently regulated by the Commodity Futures Trading Commission (CFTC). Agency under Trump administration defended has exclusive regulatory control over companies.
California Democratic senator Adam Schiff, who introduced the bill with Utah Republican senator John Curtis, said in a statement that the CFTC “gives the green light to these markets and even supports their growth.”
“Sports prediction contracts are sports betting, just with a different name.” Schiff said in his statement. “It is time for Congress to step in and eliminate this backdoor, which violates state consumer protections, intrudes on tribal sovereignty, and generates no public revenue.”
The bill also prohibits casino-style games such as virtual poker, slot machines and blackjack from being available on the platforms. Curtis said in a statement that “addictive sports betting and casino-style gaming contracts” are under state control, not federal regulators.
In response to the bill, Kalshi said in a statement that “banning sports in regulated prediction markets would push this behavior overseas where there is no regulation.”
“It is clear that this bill is motivated by casino interests threatened by competition. They are more interested in preserving their monopolies than in protecting consumers,” the company said. “With regulated prediction markets, sports trading offers consumers a fairer choice because there is no agency restricting winners and cheating people more the more they lose.”
Polymarket and the CFTC did not immediately respond to a request for comment.
Sports betting was largely illegal in the United States until 2018, when the Supreme Court struck down a 1992 federal law banning commercial sports betting in most states. Since the decision, newer prediction markets with fewer age limits and activity restrictions have been gaining momentum and are seeing hundreds of millions of dollars in trading volume each week.
These platforms allow users to bet on all kinds of events, from Oscar winners to ongoing military conflicts. Polymarket also began to see itself as a news source; but a New York Times analysis found that the company published hundreds of false and misleading posts on its social media feeds.
Most objections to the regulation came from states. Last week, Arizona’s attorney general filed criminal charges against Kalshi, accusing the site of placing election bets and operating an unlicensed illegal gambling business.
“Kalshi may present itself as a ‘predictions market,’ but what it is actually doing is running an illegal gambling operation and placing bets on Arizona elections, both of which violate Arizona law,” said Arizona attorney general Kris Mayes. “No company can decide for itself which laws to follow.”
Nevada sued Kalshi last month, arguing that the company must be licensed in the state for its betting operations. On Friday, a Nevada judge brought a brief victory to the state with a temporary restraining order banning the company from operating in the state until its next hearing on April 3. The judge said Kalshi could not offer activity-based contracts related to sports, elections and entertainment and banned users under 21 from using its platform.
“Prediction markets to the extent they facilitate unlicensed gambling are illegal in Nevada, and we have a legal duty to protect the public. We want people in the state to bet safely on a licensed book,” said Mike Dreitzer, chairman of the Nevada gaming control board. expression.
