US Senate Introduces Bipartisan Bills to Ban Sports Betting on Prediction Markets Like Kalshi [Update]

Two bipartisan U.S. Senate bills introduced in March 2026 are threatening to reshape the rapidly growing prediction markets industry by seeking a federal ban on sports betting contracts offered by platforms like Kalshi and Polymarket. The legislation represents the most significant congressional challenge yet to the sector, which captured over $720 million in NFL-related bets during the most recent season.

Two Bills, Two Approaches

The first bill, the Prediction Markets Are Gambling Act, is co-sponsored by Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah). It takes a targeted approach, amending the Commodity Exchange Act to explicitly ban prediction contracts related to sports events or casino-style games.

The second bill, the STOP Corrupt Bets Act, introduced by Senators Jeff Merkley (D-Ore.) and Elizabeth Warren (D-Mass.) along with Representative Jamie Raskin (D-Md.), casts a much wider net. This legislation would ban prediction market contracts not only on sports, but also on elections, military events, and government actions.

The bipartisan nature of both bills is notable, with sponsors crossing party lines. Analysts suggest this broad support reflects shared concern among lawmakers that prediction markets have evolved from niche financial instruments into what effectively functions as unregulated sports betting.

Why Prediction Markets Are Under Fire

While traditional sports gambling is regulated by individual states through gaming commissions, prediction markets operate under an entirely different regulatory framework. Platforms like Kalshi and Polymarket are classified as designated contract markets (DCMs) regulated by the Commodity Futures Trading Commission (CFTC), falling under federal jurisdiction rather than state gaming law.

This regulatory gap has allowed prediction market platforms to offer what critics describe as de facto sports betting without the consumer protections, responsible gambling requirements, or tax obligations that licensed sportsbooks must follow. NFL-related bets on prediction platforms hit a record $720 million, including over $100 million on a single game — figures that drew the attention of both gaming regulators and traditional sportsbook operators.

The situation has created a two-tier system where companies like DraftKings and FanDuel operate under strict state-by-state licensing requirements, while prediction market platforms can effectively offer similar wagering products nationwide under lighter federal oversight.

Industry Response and Market Impact

Kalshi has pushed back forcefully against the proposed legislation. In a public statement, the company warned that banning sports on regulated prediction markets would simply push users toward offshore and unregulated alternatives. The company argues that properly regulated prediction markets provide transparency and consumer protections that would be lost if activity migrates to unregulated offshore platforms.

Traditional sportsbook operators have largely welcomed the proposed legislation. Shares of DraftKings and Flutter Entertainment (FanDuel’s parent company) jumped more than 4% on the news that lawmakers were moving to curb prediction market competition in the sports betting space.

The Washington state attorney general’s office has separately clashed with Kalshi and Robinhood in court, arguing that prediction market contracts violate state gambling laws regardless of their federal classification.

Path Forward

Both Senate bills face significant procedural hurdles. No committee hearings have been scheduled, and Congress is currently working through a packed appropriations calendar. Political analysts give the Schiff-Curtis bill — with its narrower, sports-only focus — a slightly better chance of advancing compared to the broader STOP Corrupt Bets Act.

Regardless of whether either bill passes in its current form, the legislative activity signals a clear direction: federal lawmakers are increasingly unwilling to allow prediction markets to operate as a parallel sports betting ecosystem outside state gaming regulations. The outcome of this legislative battle will likely determine the future shape of both the prediction market and sports betting industries in the United States.