Two US senators have tabled legislation that could slam the brakes on sports betting via prediction markets, reigniting debate over where these platforms sit in America’s increasingly complex gambling landscape.

Senator John Curtis, a Republican from Utah, and California Democrat Adam Schiff introduced the Prediction Markets Are Gambling Act on 23rd March. The bill would amend federal commodity trading law to explicitly ban sports and casino contracts on platforms regulated by the Commodity Futures Trading Commission.

The move targets a regulatory grey area that’s become a proper headache for state gambling authorities. Prediction markets operate under federal CFTC oversight rather than state gambling laws, which potentially lets them offer what looks an awful lot like sports betting in states where traditional sportsbooks can’t operate legally.

State Authority at the Heart of the Debate

Curtis framed the legislation as protecting state jurisdiction over gambling. “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,” he said in a statement accompanying the bill’s introduction.

Schiff took a more pointed approach. He argued that sports prediction contracts are simply sports bets wearing a different hat, and suggested these platforms are operating “in clear violation of state and federal law” by exploiting regulatory ambiguity.

The proposed legislation would settle the question definitively. Under the bill, CFTC-regulated entities would be barred from offering contracts on sporting events, athletic competitions, or casino-style games including slots. States would maintain exclusive authority over sports wagering and traditional gambling.

Tribal Stakeholders and Industry Groups Weigh In

The bill has drawn support from an unusual coalition. State gambling regulators, tribal gaming interests, and established industry groups have all raised concerns about prediction markets encroaching on their turf.

For tribal nations in particular, the issue touches on sovereignty. These contracts could undermine gaming compacts negotiated with state governments.

Traditional sports betting operators haven’t been shy about their displeasure either. They’ve invested heavily in securing state licences and meeting regulatory requirements, only to watch prediction markets potentially sidestep those frameworks entirely.

Part of a Broader Crackdown

This isn’t the first shot across the bow for prediction markets. Schiff himself introduced the DEATH BETS Act earlier this month, targeting contracts on public figures and political assassinations. That bill followed separate legislation aimed at election betting markets.

Congress appears increasingly willing to define boundaries for an industry that’s grown rapidly in recent years. What started as platforms for political forecasting and economic indicators has expanded into territory that looks remarkably similar to established gambling products.

The bipartisan nature of the legislation suggests genuine momentum behind regulatory reform. Whether it ultimately passes remains to be seen, but the direction of travel is becoming clear. Lawmakers want clearer lines between financial instruments and gambling products, particularly when sports and casino games are involved.

For the UK market, this serves as a reminder of how differently gambling regulation can evolve across the Atlantic. Britain consolidated most gambling under a single regulatory framework years ago. America, meanwhile, continues grappling with overlapping federal and state authority, creating exactly the sort of ambiguity this bill aims to resolve.