As prediction market companies are battling with states in courtrooms over legality issues, a U.S. House Representative is calling for federal involvement.
- California Rep. Ro Khanna says sports prediction markets are causing health risks.
- Other Congressional members have proposed legislation to ban sports contracts.
- 20 states are tied up in litigation with prediction market companies.
California’s Ro Khanna posted on social media site X that Congress “must ban” sports event contracts offered by trading exchanges like Kalshi and Polymarket.
“Sports prediction markets are sports betting disguised as financial trading,” Khanna wrote on Tuesday. “They flout state and tribal gambling laws, siphon state tax revenues, fuel addiction, and expose young Americans to public health risks while evading state consumer safeguards.”
Sports prediction markets are sports betting disguised as financial trading. They flout state and tribal gambling laws, siphon state tax revenues, fuel addiction, and expose young Americans to public health risks while evading state consumer safeguards. Congress must ban them.
— Ro Khanna (@RoKhanna) November 10, 2026
Khanna didn’t offer any other commentary, nor has he proposed any legislation on the matter at this time.
Gaining steam
Khanna joins another California Congressional member looking to end sports contracts like spreads, moneylines, and totals on leagues like the NFL and NBA from being available in legal and non-legal sports betting states.
Sen. Adam Schiff proposed a bipartisan bill earlier this year with Utah Sen. John Curtis aimed at prohibiting prediction market operators from offering sports contracts and casino-style markets.
However, prediction markets have flourished since sports contracts began appearing in early 2025, despite little oversight and regulation compared to legal sportsbooks. Kalshi has become the biggest trading exchange in the U.S., reporting notional volume of over $10 billion last weekend alone, mostly from sports and combo plays that act as parlays.
It’s unclear just how involved Congress will become in the future of prediction markets, but the Supreme Court is eventually expected to make a ruling on what can and can’t be offered based on the legal battles at the state level.
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State battlegrounds
Prediction markets are regulated by the Commodity Futures Trading Commission and are available nationwide, but Nevada, Michigan, and other states have been able to push sports event contracts out of their jurisdictions.
Twenty states are tied up in litigation with prediction markets, and even the CFTC has filed lawsuits on behalf of operators like Kalshi in seven states, including Illinois, New York, and Massachusetts. Utah recently filed criminal charges against Kalshi’s co-founders.
Gaming regulators in those jurisdictions argue that prediction markets are in violation of state gambling laws, while Kalshi and other trading exchanges say they only answer to the CFTC. Multiple judges have ruled against prediction market operators’ premise.
