Bipartisan bill would ban prediction markets for sporting events

The Wild West of legalized sports wagering has been complicated by the rise of prediction markets, which have crept into the sports betting turf.

A new Congressional bill — bipartisan, amazingly — would keep prediction markets out of sports.

Via Krystal Hur of the Wall Street Journal, Senators Adam Schiff (D-Cal.) and John Curtis (R-Utah) will introduce on Monday legislation that would “prohibit entities regulated by the Commodity Futures Trading Commission, including prediction-market exchanges Kalshi and Polymarket’s U.S. platform, from listing contracts related to sporting events.”

The bill would also prohibit “casino-style games” from appearing on prediction-market platforms.

“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,” Curtis said.

It comes at a time when the CFTC and the various states are grappling over the potential regulation of prediction markets. Last week, Arizona filed criminal charges against Kalshi for operating an illegal gambling business. On Friday, Nevada secured a temporary restraining order against Kalshi, preventing it from offering “event-based contracts” regarding “sports, elections and entertainment.”

The current sports betting industry emerged from a successful attack on federal legislation that prevented states (other than Nevada) from legalizing gambling. In May 2018, the Supreme Court found that the states have the right to allow gambling, if they choose.

Major League Baseball announced on Thursday a deal with Polymarket. Obviously, that arrangement becomes far less valuable, or relevant, if the proposed legislation becomes law.

It’s shaping up to be a big-money battle between the Coke-and-Pepsi companies that dominate sports betting (DraftKings and FanDuel) and prediction markets (Kalshi and Polymarket). Which makes sense, because the whole thing is about money.

Specifically, it’s about coming up with ways to take as much of it as possible from people who delude themselves into thinking that they can make easy money against companies whose billions come from the simple fact that most people lose.