US senators Adam Schiff and John Curtis are expected to introduce a bipartisan bill on Monday that would ban sports betting and “casino-style” contracts from prediction markets regulated by the Commodity Futures Trading Commission (CFTC), the Wall Street Journal reported.
“Too many youth in Utah are being exposed to addictive sports betting and casino-style gaming contracts, which are under the control of the state, not federal regulators,” Senator Curtis, one of the bill’s co-sponsors, told the WSJ.
As reported, if introduced, the measure would increase pressure from Washington against some prediction market contracts. The report adds to the growing regulatory scrutiny on prediction markets following insider trading concerns raised by the US-Israel war with Iran.
On March 10, Schiff introduced the Death Bets Act, which seeks to ban CFTC-regulated prediction markets from listing contracts involving war, terrorism, assassination, and personal death.
Connected: Market booms on betting on Iran, Congress eyes sanctions
Sports markets drive trading volume
Sports betting is a major source of trading activity on prediction market platforms. According to Dune data, sports-related contracts accounted for 47.7% of Polymarket’s weekly estimated volume and 78.8% for Kalshi last week.
Sports betting generated $1.2 billion in weekly estimated trading volume for Polymarket and $2.6 billion for Kalashi.
State and federal lines blurred
Regulatory pressure has intensified outside Congress as well. On March 12, the CFTC issued a staff advisory classifying event contracts on prediction markets as a “financial asset class.”
The commodities regulator also submitted an advanced notice of proposed rulemaking, seeking public comment on how the Commodity Exchange Act (CEA) would apply to prediction markets. PolyMarket and Kalshi are regulated by the CFTC as Designated Contract Markets (DCMs).
Connected: Kalshi, Polymarket cease trading in Nevada after court decision
While CFTC Chairman Michael Selig claimed that the CFTC had “exclusive jurisdiction” over prediction markets, an Ohio judge tested that claim in a March 9 decision, ruling that Kalshi failed to show that the CEA would “necessarily preempt Ohio’s sports gambling laws,” or that these sports betting contracts would fall under the CFTC’s “exclusive jurisdiction.”
On Friday, a Nevada judge temporarily barred Kalshi for 14 days from offering sports, election and entertainment programming contracts in the state, finding that regulators have a strong chance of success in arguing that the market violated Nevada gambling law.
Cointelegraph contacted senators for comment and a copy of the draft bill.
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