Lawmakers push bipartisan bill to ban sports betting on Kalshi and Polymarket

Senators Adam Schiff (D-CA) and John Curtis (R-UT) introduced new legislation on Monday to restrict prediction market platforms such as Kalshi and Polymarket from offering contracts that allow users to wager on sporting events or engage in casino-style activities.

The proposed bipartisan bill focuses on federally regulated prediction market platforms and would not affect companies like FanDuel and DraftKings, which operate under state-by-state gambling regulations.

In a statement, Schiff argued that these prediction-based contracts are effectively no different from traditional sports betting. “Sports prediction contracts are sports bets — just with a different name. And yet, these contracts are currently offered in all fifty states in clear violation of state and federal law,” he said.

Sports gambling has expanded rapidly in the United States since a 2018 Supreme Court ruling allowed states to legalise betting. The total volume of sports wagers increased dramatically, rising from $4.9 billion in 2017 to $121.1 billion in 2023. At the same time, professional sports leagues have entered into partnerships with betting companies, even as some athletes face legal consequences for alleged involvement in money laundering.

Prediction markets such as Kalshi and Polymarket operate under the oversight of the Commodity Futures Trading Commission (CFTC), which places them under federal jurisdiction. This distinction allows lawmakers like Schiff and Curtis to pursue regulation at the national level rather than leaving oversight entirely to states. However, the senators argue that the functional differences between prediction markets and traditional sportsbooks are minimal.

For example, Kalshi reported that its Super Bowl-related trading volume exceeded $1 billion this year, representing a 2700% increase over the previous year. Curtis expressed concern over the accessibility of such platforms, particularly for younger users. “Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators,” he said.

Concerns around gambling addiction have been supported by research. A study conducted by the University of California, San Diego’s Qualcomm Institute and School of Medicine found that online search queries related to gambling addiction rose by 61% following the introduction of online sportsbooks and have continued to increase over time.

Kalshi has pushed back against the proposed legislation. Company spokesperson Elisabeth Diana argued that the bill could reduce competition and drive users toward unregulated offshore platforms. “It’s clear this bill is motivated by casino interests that are threatened by competition. They’re more worried about protecting their monopolies than protecting consumers,” she said.

The company is already dealing with regulatory pressure. Kalshi is currently facing a temporary ban in Nevada and criminal charges in Arizona related to its operations.

Amid these challenges, Kalshi announced on Monday that it is introducing new screening measures designed to reduce risks such as insider trading and market manipulation in both political and sports-related contracts. The company said it has developed screening lists in collaboration with its partners at IC36 to prevent known athletes, officials, and related personnel from participating in markets tied to their own events.

Recent incidents have highlighted these risks. Kalshi previously suspended a political candidate for trading on their own election outcome and fined a YouTube creator associated with MrBeast after it was found that non-public information had been used to place bets.

Polymarket has also taken steps to tighten its policies. The platform updated its rules on Monday to explicitly prohibit the use of stolen confidential information, illegal tips, or participation in markets where users directly influence outcomes. The growing scrutiny from lawmakers, combined with internal policy changes by the platforms themselves, signals an intensifying debate over how prediction markets should be regulated relative to traditional gambling systems.