A bipartisan bill seeks to ban sports betting on Kalshi and Polymarket

Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah) introduced a bill Monday that could prevent prediction market platforms Kalshi and Polymarket from allowing users to bet money on sporting events or play casino-style games.

This bipartisan bill would not apply to FanDuel and DraftKings, which are subject to individual state gambling laws, rather than federal laws.

“Sports prediction contracts are sports betting — just by a different name. However, these contracts are currently offered in all 50 states in clear violation of state and federal law,” Schiff said in a statement.

Gambling has become more prominent in American culture following a 2018 Supreme Court decision that allowed states to legalize sports betting. Total sports betting has risen from $4.9 billion in 2017 to $121.1 billion in 2023. Most major professional sports leagues now have contracts with gambling companies, even as star athletes face potential prison time for their alleged roles in money laundering conspiracies.

Prediction markets like Kalshi and Polymarket are regulated by the Commodity Futures Trading Commission (CFTC), which is why Schiff and Curtis can handle them under federal jurisdiction, rather than leaving them to state-regulated sports betting. But these senators argue that there is little difference in practice between betting on sports via federally or state-regulated apps. For example, Kalshi’s Super Bowl turnover reached more than $1 billion this year — a 2,700% increase year over year.

“Too many young people in Utah are exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not federal regulation,” Curtis said in a statement.

Curtis’s concerns about gambling addiction are valid. Researchers at the Qualcomm Institute and UC San Diego School of Medicine analyzed online search query data and found that when online sports betting became available, searches for help with gambling addiction increased by 61% and have continued to grow ever since.

This bill would stifle competition and push users to third-party prediction markets, Calci spokeswoman Elizabeth Diana told TechCrunch.

“This bill is clearly motivated by the interests of casinos that are threatened by competition,” Diana said. “They are more concerned about protecting their monopolies than protecting consumers.”

Polymarket did not respond to a request for comment.

Calci has faced other legal challenges recently, as the app was temporarily banned in Nevada and he faces criminal charges in Arizona.