After more than a year of controversy involving prediction markets, a Utah senator filed a bill to ban most of the offerings. The proposal would ban the companies from offering event contracts mimicking sports betting and other “casino-style” games.
Sen. John Curtis’s (R) Prediction Markets Are Gambling Act would prohibit companies like Kalshi and Polymarket from offering sports markets and similar markets that resemble gambling.
Many state gaming regulators have alleged that these offerings are nothing more than sports betting. They are an end run around state gaming laws. Curtis believes the bill will protect minors from sports betting and keep the platforms compliant with state laws.
“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 in announcing the legislation.
“Our bipartisan legislation clarifies regulatory jurisdiction, ensuring that states can maintain their authority over sports betting and casino gaming. The Prediction Markets Are Gambling Act is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.”
Kalshi Says Legislation Aimed At Protecting Casinos
California Sen. Adam Schiff (D) co-sponsored the legislation. Both senators argue that prediction market sports contracts are “indistinguishable from gambling.” The bill amends the Commodity Exchange Act. In 1936, lawmakers passed the bill regulating futures and commodities trading. As a result, the bill created the Commodity Futures Trading Commission (CFTC).
“Sports prediction contracts are sports bets – just with a different name,” Schiff said. “And yet, these contracts are currently offered in all 50 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 and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue. I’m proud to partner with Sen. Curtis to put a stop to these illegal markets.”
Prediction market firms have argued that their markets are different from traditional sports betting. Additionally, they argue the CFTC already regulates the platforms. Thus, state gaming regulators don’t have authority over them.
A Kalshi representative local media in Utah that the bill was meant to protect casino interests and would move users to offshore, unregulated operators.
“It’s clear this bill is motivated by casino interests that are threatened by competition,” the spokesperson said. “They’re more worried about protecting their monopolies than protecting consumers. Sports trading on regulated prediction markets offer a fairer choice to consumers, with no house that restricts winners and hooks people the more they lose.
“We should let competition run its course instead of protecting monopolies.”
Prediction Markets Face Growing Number Of Critics
Sports prediction markets continue to be a source of controversy among state gaming regulators. Last week, a Nevada judge granted the state a 14-day temporary restraining order against Kalshi. Consequently, the state forced Kalshi to remove most of its markets in the Silver State.
Also last week, Arizona became the first state to file criminal charges against Kalshi. A federal judge in Ohio recently ruled that Kalshi must follow state gaming laws.
In January, a state judge in Massachusetts granted a preliminary injunction against Kalshi, barring it from offering sports contracts in the state. Regulators in Tennessee have sent cease-and-desist letters to three prediction market companies.
In September, several federal lawmakers sent a letter to the CFTC calling for reform. Former Trump White House Chief of Staff Mick Mulvaney has also said the platforms are more like traditional gambling than actual investing and should be governed by state gaming regulators rather than by the CFTC.
