A bipartisan bill introduced in the US Senate would ban prediction markets like Kalshi and Polymarket from listing contracts tied to sporting events, closing a federal loophole that has allowed them to operate across all fifty states
Sports betting in the US is a matter for individual states.
Since the Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018, states have been free to legalise and regulate it as they see fit – collecting tax revenue, enforcing consumer protections, and negotiating integrity agreements with leagues.
Prediction market platforms like Kalshi and Polymarket US took a different route, registering with the Commodity Futures Trading Commission (CFTC) as designated contract markets and classifying their sports contracts as commodity futures rather than wagers.
Registered in this way (albeit taking different paths to the same regulatory standing), Kalshi and Polymarket US were placed under federal oversight, allowing them to operate in all fifty states, regardless of whether those states permit sports gambling. Essentially, they can bypass state licensing requirements and the revenue frameworks built around traditional bookmakers.
California Democrat Senator Adam Schiff and Utah Republican Senator John Curtis introduced legislation on 23 March 2026 to close it.
The Prediction Markets Are Gambling Act would amend the Commodity Exchange Act to prohibit any CFTC-registered entity from listing contracts tied to sporting events, athletic competitions, or casino-style games, covering amateur, collegiate, and professional sports in its entirety. A rule of construction in the bill explicitly preserves state authority to regulate or prohibit such contracts independently.
“Sports prediction contracts are sports bets – just with a different name,” Schiff said. Curtis added that sports betting on prediction markets is a state sovereignty, arguing the products belong under state control rather than federal regulators.
Integrity concerns have been building
The growth of prediction markets has created problems for sports leagues and governing bodies, because existing integrity frameworks were not designed to address them.
Within state-regulated environments, traditional sportsbooks must maintain data-sharing agreements and suspicious activity reporting arrangements with leagues. This is something prediction markets have not had to comply with thus far.
Prediction markets have already started reacting to the bill, with Kalshi announcing it will begin proactively blocking athletes, referees, and other personnel involved in college and professional sport from trading markets associated with their competitions – an acknowledgement that previous after-the-fact surveillance was insufficient.
Kalshi in particular has faced mounting legal pressure. Arizona became the first state to file criminal charges against the platform last week, with Attorney General Kris Mayes accusing it of running an unlicensed gambling operation and taking illegal bets on state elections.
The 20-count complaint, filed as misdemeanors in Maricopa County, included charges relating to professional and college sporting contests and individual player performance. Kalshi had called the charges “meritless” and contested the characterisation entirely, arguing it operates under exclusive federal jurisdiction.
Sport is taking different approaches
Some leagues have chosen to engage with prediction markets rather than oppose them. MLB named Polymarket its official prediction market exchange on 19 March 2026 and simultaneously signed a memorandum of understanding with CFTC chairman Michael Selig – the first such agreement between a professional sports league and a federal regulator.
The MOU establishes an information-sharing framework and commits both parties to work together to restrict markets that present integrity risks, such as those tied to individual pitches, manager decisions, and umpire performance. The NHL signed prediction market partnerships last October; MLS has also partnered with Polymarket.
How the Schiff-Curtis bill advances through Congress is uncertain, though the rapid growth of prediction markets in sports will be hard for lawmakers to ignore.
Kalshi CEO Tarek Mansour told CNBC that the platform’s Super Bowl Sunday trading alone exceeded $1bn, up 2,700% year-on-year. Data tracker DeFi Rate, which aggregates publicly available platform data, recorded $1.63bn in combined Super Bowl volume across Kalshi and Polymarket, with the two platforms combining for $4.7bn across the full week.
