Bipartisan Bill Aims to Ban Sports Betting on Prediction Markets
- Senators Adam Schiff and John Curtis plan to introduce a bill prohibiting sports betting and casino-style contracts on prediction markets regulated by the CFTC.
- Sports-related contracts accounted for nearly half (47.7%) of Polymarket’s weekly trading volume, generating $1.2 billion.
- Kalshi reported a higher percentage, with sports contracts making up about 78.8% of its $2.6 billion weekly volume.
- The CFTC has classified event contracts on prediction markets as a financial asset class and is seeking public feedback on regulatory applications.
- Recent court rulings in Nevada temporarily blocked Kalshi from offering certain event contracts, citing potential violations of state gambling laws.
The proposed legislation reflects growing concerns over the impact of sports betting on young people and aims to shift regulatory control from federal to state authorities. This move comes amid increasing scrutiny of prediction markets in light of insider trading worries linked to global events.
If passed, this bill could significantly affect the current landscape of prediction markets, where sports betting represents a substantial portion of trading activity, as evidenced by Kalshi’s $2.6 billion weekly volume.(Source)
