Senate Bill to Ban Sports Betting on Prediction Markets

A bipartisan pair of U.S. senators plans to introduce legislation on Monday that would ban CFTC-regulated prediction market platforms from offering sports betting and casino-style contracts, a move that could strip billions in weekly volume from Polymarket, Kalshi, and similar operators.

Senators Adam Schiff (D-CA) and John Curtis (R-UT) are behind the bill, which would amend the Commodity Exchange Act to explicitly prohibit contracts tied to sports events, slots, poker, and bingo on platforms designated as CFTC contract markets.

Senator Curtis framed the effort as a consumer protection measure. “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 in a statement reported by CoinTelegraph.

Senator Schiff, who introduced the related DEATH BETS Act on March 10, accused the CFTC of “greenlighting these markets and promoting their growth.” The new bill marks at least the seventh federal legislative attempt targeting prediction markets in 2026, but it is the first with bipartisan Senate sponsorship.

The distinction between “prediction market contracts” and “sports bets” sits at the center of the debate. Supporters of the bill argue that when a contract settles on an NBA game or a Super Bowl outcome, the economic function is identical to a wager regardless of how it is structured or settled. Prediction market advocates counter that these contracts are information-aggregation tools that produce valuable price signals, not gambling products.

Why Prediction Markets Are a $3.8 Billion Weekly Target

The scale of sports-related activity on prediction platforms explains why legislators are acting now. Kalshi’s weekly notional sports volume has reached $2.6 billion, representing 78.8% of its total trading activity. Polymarket’s sports volume sits at $1.2 billion per week, or 47.7% of its total.

Polymarket, which settles contracts in USDC on the Polygon blockchain, processed $7 billion in total volume in February 2026 alone. Kalshi, a centralized platform, has hit a revenue run rate exceeding $1 billion. Their combined valuations tell the story of how fast the sector has grown: Kalshi is valued near $22 billion, Polymarket at roughly $9 billion.

The crypto connection is not incidental. Polymarket’s use of blockchain settlement through USDC and smart contracts differentiates it structurally from traditional sportsbooks, which operate through state-licensed frameworks. This technical distinction has allowed crypto-native platforms to argue they fall under CFTC jurisdiction over commodity futures and event contracts rather than state gambling laws.

CFTC Chair Michael Selig has leaned into that interpretation, asserting exclusive federal jurisdiction over event contracts. But critics, including institutional investors watching crypto regulatory shifts, see this as a jurisdictional land grab that lets prediction platforms operate as de facto sportsbooks without state oversight.

The information-aggregation argument carries genuine weight in some domains. Prediction markets proved their value during the 2024 U.S. presidential election cycle, when Polymarket’s odds consistently outperformed traditional polls. The bull case holds that these platforms provide real price discovery on uncertain outcomes.

The bear case is simpler: when the underlying contract is whether the Lakers beat the Celtics, the settlement mechanism does not change the economic reality. A bet settled in USDC on Polygon functions identically to one placed through DraftKings, and the crypto wrapper should not exempt it from gambling regulation.

Legal Pressure Is Already Mounting From Multiple Directions

The Senate bill arrives amid an escalating wave of state and federal legal challenges. Nevada issued a temporary restraining order against Kalshi over its sports contracts. An Ohio court ruled against Kalshi on March 9. Arizona has filed criminal charges against the platform.

A coalition of 39 states plus the District of Columbia is urging courts to uphold state authority over sports gambling, a coordinated effort that signals broad bipartisan resistance at the state level regardless of what happens in Congress.

For CFTC-regulated platforms, the bill creates a binary risk. Kalshi, which derives nearly 79% of its volume from sports, faces an existential revenue threat if the legislation passes. Polymarket’s exposure is significant but less concentrated at 47.7%.

Some regulated operators may paradoxically welcome a clear federal framework. The current legal ambiguity, with the CFTC claiming exclusive jurisdiction while states file lawsuits and restraining orders, creates operational uncertainty that may be worse than a defined prohibition on sports contracts. A platform like Kalshi could pivot toward political, economic, and weather event contracts where its regulatory footing is stronger.

Decentralized prediction protocols present a harder enforcement challenge. Permissionless platforms built on Ethereum or other blockchains cannot be shut down through a cease-and-desist letter. If the bill passes, displaced sports betting demand could migrate to decentralized alternatives or offshore platforms, a pattern familiar from broader shifts in how blockchain technology adapts to regulatory pressure.

The procedural path forward remains uncertain. While bipartisan sponsorship gives the bill more credibility than previous single-party efforts, whether it can advance through committee in a Republican-controlled Senate is an open question. The prediction market industry has grown rapidly enough to build a lobbying presence, and CFTC leadership’s pro-jurisdiction stance suggests the executive branch may not be fully aligned with the legislative push.

What is clear is the direction of travel. Seven federal bills in under three months, combined with coordinated state legal action and a bipartisan Senate effort, signals that the regulatory window prediction markets have operated through is narrowing. Platforms generating billions in transaction volume across crypto and traditional finance will need to adapt their business models or prepare for prolonged legal battles on multiple fronts.

The total prediction market sector now processes over $13 billion in monthly transactions. How much of that survives the current legislative cycle depends on whether platforms can convince lawmakers that event contracts and sports bets are fundamentally different products, or whether the economic substance wins out over the technical structure.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.