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A new bipartisan bill to ban sports betting is sending shockwaves through the rapidly expanding world of online prediction markets, setting the stage for a high-stakes clash between federal lawmakers, regulators, and emerging betting platforms.

Senate Takes Aim at Prediction Markets

Lawmakers in the U.S. Senate introduced legislation Monday that would prohibit federally regulated platforms from offering wagers on sporting events — a move that could disrupt billions of dollars in trades tied to spectacles like the Super Bowl and NCAA March Madness.

The bill, spearheaded by Adam Schiff and John Curtis, targets companies such as Kalshi and Polymarket, which have surged in popularity by allowing users to wager on real-world outcomes.

“These so-called prediction contracts are sports bets in disguise,” Schiff said, arguing that federal regulators have effectively opened a backdoor to gambling.

Expanding Crackdown Beyond Sports

The proposed legislation goes further, banning casino-style offerings — including virtual poker, blackjack, and slot-style contracts — from appearing on these platforms.

Curtis emphasized that such “addictive” betting mechanisms should fall under state authority rather than federal oversight, intensifying the debate over who controls the future of digital wagering.

Currently, these markets are overseen by the Commodity Futures Trading Commission, which has maintained that it holds exclusive jurisdiction — a stance now under direct political challenge.

Legal Battles Mount Across States

The bipartisan bill to ban sports betting arrives amid escalating legal pressure at the state level.

In Nevada, a judge recently issued a temporary two-week ban on most of Kalshi’s operations following a lawsuit, marking a significant blow to the company’s expansion. The court order restricts event-based contracts tied to sports, elections, and entertainment, while also blocking users under 21 from accessing the platform.

Meanwhile, Arizona’s attorney general, Kris Mayes, has filed criminal charges against Kalshi, accusing it of running an illegal gambling operation and accepting wagers on elections without proper licensing.

“No company gets to decide which laws it follows,” Mayes said, underscoring the growing resistance from states.

Industry Pushback and Rising Stakes

Kalshi fired back, warning that banning regulated sports prediction markets could drive users offshore into unregulated spaces.

“Prohibiting these markets won’t stop betting — it will just remove safeguards,” the company argued, claiming the legislation is fueled by traditional casino interests seeking to stifle competition.

The debate echoes a broader shift that began in 2018, when the US Supreme Court struck down a federal ban on sports betting, unleashing a wave of legalization and innovation across the country.

A Booming Market Under Scrutiny

Prediction platforms have grown rapidly, attracting hundreds of millions of dollars in weekly trading volume and allowing bets on everything from entertainment awards to geopolitical events.

However, scrutiny is intensifying. A The New York Times analysis found that some platforms have circulated misleading information on social media, raising concerns about their dual role as both betting venues and information sources.

As lawmakers, regulators, and companies dig in, the bipartisan bill to ban sports betting could redefine the boundaries of online wagering — determining whether these markets remain a frontier of innovation or are reined in as a new form of gambling.