Two U.S. Senators on Monday are introducing a bill that would ban Commodity Futures Trading Commission-licensed prediction platforms from offering sports event contracts, The Wall Street Journal reported.
The bipartisan legislation would prohibit platforms such as Kalshi and Polymarket from allowing customers to buy and sell contracts related to outcomes of sports events.
Key Takeaways
- The CFTC said last month that states do not have the right to regulate prediction markets.
- Kalshi and Polymarket both recently received $22 billion valuations.
- States have failed to establish a clear legal precedent for sports contracts.
The upcoming proposal will mark the first time that the U.S. Congress has entered the ongoing debate over sports prediction contracts with bipartisan support.
Debates over the legality of the markets birthed a series of legal disputes between prediction platforms, who claim that they abide by their federal regulations, and state officials, who liken the special contracts to unregulated and illegal sports gambling.
The CFTC has supported prediction outlets – which also offer markets in finance, weather, politics, and entertainment – in their disputes with state officials. In February, it filed a brief that asserted that state officials do not have the right to oversee prediction platforms since federal authority preempts state regulation.
Despite that, prediction platforms have found themselves embattled in legal disputes in state and federal courts.
“The CFTC is greenlighting these markets and even promoting their growth,” Sen. Adam Schiff (D-CA) said. “It’s time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue.”
On top of the sports contract regulations, the bill aims to prohibit “casino-style games,” including blackjack, video poker, and slot machines, from appearing on the platforms.
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Debates and legality
Sports event contracts offered by prediction platforms present binary outcomes to customers related to a variety of aspects of sports. That includes which team will win an event or championship, if a player will score a certain number of points, if there will be more or less than a given number of points scored, and many other options.
Contract outcomes are simply listed as “Yes” or “No.” Customers buy the contract(s) that is associated with their predicted outcome and win $1 for every winning contract.
The primary difference between prediction platforms and legal sportsbooks is that prices at prediction markets are determined by real-time supply and demand.
Contract values respond to the sentiment of the user base, whereas sportsbook odds are made by the house and include a vig.
Kalshi was recently forced to halt its sports, entertainment, and election contract trading in Nevada after a court issued a temporary restraining order against the company's markets. The Arizona Attorney General last week also filed criminal charges against Kalshi for running an “illegal gambling market.”
A Massachusetts court also ruled in favor of the state and its right to halt sports contracts. However, New Jersey and Tennessee both ruled in favor of prediction platforms by granting them a temporary injunction against state gaming officials, meaning there isn’t a clear precedent available at the state level.
Prediction platforms are growing quickly
While Kalshi, Polymarket, and other outlets remain controversial, they are part of a rapidly growing prediction industry.
The Wall Street Journal reported earlier this month that both platforms held preliminary talks with investors about fundraising at roughly $22 billion valuations, close to double the figures they were given in late 2025.
Combined trading volume at the two prediction leaders hit $18.3 billion in February, according to The Block. That’s an enormous increase from the less than $2 billion that was reached in August 2025, the final month before the NFL season began.
