A new bipartisan bill has been introduced in the U.S. Senate to explicitly ban sports-related contracts on federally regulated prediction markets.
This legislative push comes directly after a major regulatory shift. In February 2026, the Commodity Futures Trading Commission (CFTC), the main regulator for these markets, withdrew its own proposed rule that would have banned contracts on "gaming," including sports. This created a regulatory vacuum, effectively passing the decision from the agency to lawmakers. Congress is now stepping in to write that ban into law itself.
The path to this bill was paved by several key developments. First and foremost was the CFTC's withdrawal of its rule. This single action changed the game, forcing advocates of a ban to seek a legislative solution instead of a regulatory one. The House of Representatives had already signaled its intent by introducing a similar bill, H.R. 7477, in February, creating momentum across both chambers of Congress.
Secondly, pressure mounted from the states. Just last week, Arizona's Attorney General filed criminal charges against the prediction market platform Kalshi for offering markets on sports outcomes. This escalated the situation from a regulatory debate into a direct conflict between state and federal authority. The proposed Senate bill is seen as a way to resolve this tension by clearly leaving sports betting under state control.
Finally, the issue gained significant public attention. Major sports leagues, like Major League Baseball (MLB), recently announced integrity partnerships related to prediction markets. While intended to ensure fairness, this brought the practice into the mainstream, raising concerns about creating a new, lightly regulated channel for sports wagering. This increased visibility made it politically more urgent for lawmakers to act.
In essence, this bill isn't just about one type of contract. It's an attempt to draw a bright, legal line between event contracts under federal oversight and sports wagering, which has traditionally been regulated by individual states. If passed, it would force platforms like Kalshi and Polymarket to delist their sports markets, tilting the competitive landscape back in favor of traditional sportsbooks like DraftKings and Flutter.
- CFTC (Commodity Futures Trading Commission): The U.S. federal agency that regulates derivatives markets, including futures, options, and swaps.
- Prediction Markets: Platforms where users trade contracts based on the outcomes of future events, such as elections, economic data releases, or sporting events.
- Statutory Ban: A prohibition enacted through a formal law (a statute) passed by a legislative body like Congress, as opposed to a rule created by a regulatory agency.