A bill to ban sports betting on prediction markets has been introduced by a bi-partisan group of U.S. Senators to prevent betting on sites such as Polymarket and Kalshi.
The bill was introduced on Monday and would “bar any entity registered with the Commodity Futures Trading Commission from listing or facilitating transactions linked to sporting events or athletic competitions,” according to the New York Post.
It was co-sponsored by California Democrat Sen. Adam Schiff and Utah’s Republican Sen. John Curtis. It marks the first time any elected official on Capitol Hill has moved to scale back the rush to expand gambling in years.
The bill comes on the heels of criminal charges filed against Kalshi by Arizona’s attorney general alleging that the online futures trading outfit was operating an illegal gambling operation under Arizona state law.
“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,’ Sen. Curtis said in a statement.
For his part, Senator Schiff added that the futures market is misleading, and said, “Sports prediction contracts are sports bets — just with a different name. And yet, these contracts have been offered in all fifty states in clear violation of state and federal law. Rather than enforce the law, the CFTC is greenlighting these markets and even promoting their growth. It’s time for Congress to step in.”
Kalshi said it was shocked by the bill.
“Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists,” the company told the Post on Monday. “It’s clear this bill is motivated by casino interests that are threatened by competition.”
While Schiff and Curtis maintain that Kalshi and Polymarket and other futures trading groups are thinly veiled gambling, the futures market does operate on different rules than straight-up gambling markets.
“While sports betting is typically overseen at the state level, prediction markets use financial instruments such as futures and commodity contracts, placing them under federal jurisdiction. Recent months have seen lawmakers, state governments and federal regulators debate about who should have oversight of event and sports contracts on prediction platforms,” the Post explained.
Still, these futures outlets have suffered a backlash for greatly expanding their reach. For instance, they took criticism for taking contracts on the recent U.S. actions against Venezuela, the Iran War, and have increasingly entered into sports markets.
The bill would also prohibit bets for casino-style games such as poker and blackjack.
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