Bipartisan bill seeks to ban sports betting on Kalshi and Polymarket

On Monday, Senators Adam Schiff (D-CA) and John Curtis (R-UT) unveiled a bipartisan bill aimed at curbing sports betting on prediction market platforms like Kalshi and Polymarket. This proposed legislation seeks to restrict these platforms from allowing users to place bets on sporting events or engage in casino-style gaming, distinguishing them from traditional betting sites such as FanDuel and DraftKings, which operate under state-specific gambling regulations. Senator Schiff emphasized the nature of sports prediction contracts, stating, "Sports prediction contracts are sports bets — just with a different name. And yet, these contracts are currently offered in all fifty states in clear violation of state and federal law." The growing popularity of gambling in the U.S. can be traced back to a 2018 Supreme Court ruling that empowered states to legalize sports betting. Since then, total sports wagers have surged from $4.9 billion in 2017 to an astounding $121.1 billion in 2023, with numerous major sports leagues forming partnerships with gambling companies, despite some athletes facing legal repercussions for alleged involvement in money laundering schemes. The prediction markets Kalshi and Polymarket are currently regulated by the Commodity Futures Trading Commission (CFTC), allowing the senators to address these platforms at the federal level rather than through state-run sportsbooks. However, Schiff and Curtis argue that the practical distinctions between federally and state-regulated betting apps are minimal. Notably, Kalshi's trading volume for the Super Bowl ballooned to over $1 billion this year, marking a staggering 2700% increase from the previous year. Senator Curtis voiced concerns regarding the impact of gambling on youth, stating, "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." His apprehensions about gambling addiction are supported by research from the University of California San Diego’s Qualcomm Institute and School of Medicine, which indicated that the availability of online sportsbooks sparked a 61% rise in online searches for gambling addiction assistance, a trend that has persisted since. In response to the proposed bill, Kalshi spokesperson Elisabeth Diana argued that it would hinder competition and drive users towards offshore prediction markets. "It’s clear this bill is motivated by casino interests that are threatened by competition. They’re more worried about protecting their monopolies than protecting consumers," Diana stated. Meanwhile, Polymarket has yet to respond to inquiries regarding the legislation, and Kalshi is currently facing other legal hurdles, including a temporary ban in Nevada and criminal charges in Arizona.