The Prediction Markets Are Gambling Act marked the Senate's first bipartisan bill seeking to regulate prediction markets

"It ought to be up to the states to decide what kind of gambling goes on within their state. This kind of end run around the law is encouraging vast amounts of gambling. We saw $1 billion of trading in prediction contracts just over the Super Bowl alone. That's something that ought to be decided state by state and not decided for them by this industry," said Senator Schiff.

Washington D.C. - In case you missed it, U.S. Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah) introduced the Senate's first bipartisan bill seeking to regulate prediction markets by prohibiting Commodity Futures Trading Commission (CFTC) registered entities from listing prediction contracts that resemble a sports bet or casino-style game. The legislation would reinforce Congress' original intent that the Commodity Exchange Act does not permit sports gambling and removes any ambiguity in the statute.

Background:

As a member of the Senate Agriculture Committee, Senator Schiff has raised the alarm about the current lack of federal regulation in this industry. Schiff led more than 20 Senators urging the CFTC to abstain from intervening in ongoing litigation, as Chairman Selig pledged to do in his confirmation hearing. He has also raised the alarm on the dangers of "death contracts," such as whether Artemis II would explode or whether Iran's Ali Khameni would be "out as Supreme Leader."

He wrote to the CFTC along with other Senators on the need for the CFTC to vigorously enforce a prohibition on these "death contracts." He subsequently introduced the DEATH BETS Act, legislation that would remove any regulatory discretion that the CFTC has to permit these "death contracts," explicitly and categorically prohibiting any CFTC registered entity from listing contracts on terrorism, assassination, war, or an individual's death. Last week, Sen. Schiff also joined Senators Elissa Slotkin (D-Mich.), Todd Young (R-Ind.), and John Curtis (R-Utah) to introduce legislation to prohibit federally elected officials and government employees from using insider information to bet on a prediction market contract.

See coverage below:

Wall Street Journal: Lawmakers Introduce Bipartisan Bill Banning Sports Bets on Prediction Markets

A bipartisan pair of U.S. senators are introducing legislation Monday to prohibit entities regulated by the Commodity Futures Trading Commission, including prediction-market exchanges Kalshi and Polymarket's U.S. platform, from listing contracts related to sporting events.

"The CFTC is greenlighting these markets and even promoting their growth," Sen. Adam Schiff (D., Calif.) said. "It's time for Congress to step in and eliminate this backdoor, which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue."

The legislation is the first bipartisan Senate bill seeking to regulate prediction markets. The bill also seeks to prohibit "casino-style games" from being listed on the platforms, such as slot machine games, video poker, blackjack and bingo.

"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," said Sen. John Curtis (R., Utah), the proposed bill's co-sponsor.

While Kalshi and Polymarket offer yes-or-no wagers tied to everything from politics to the weather to pop culture, much of the trading activity is focused on professional and college sports, putting the platforms in competition with betting sites such as FanDuel and DraftKings.

"Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists," said Elisabeth Diana, a Kalshi spokeswoman. "It's clear this bill is motivated by casino interests that are threatened by competition."

Polymarket and the CFTC didn't immediately respond to a request for comment.

Polymarket has a data partnership with Dow Jones, the publisher of The Wall Street Journal.

DraftKings stock rose 7.2% in premarket trading early Monday morning. Shares of Flutter Entertainment, the parent company of FanDuel, gained 9.4%.

Lawmakers, states and federal regulators have sparred in recent months over how event contracts on prediction-market platforms, including on sports, should be regulated, and by whom.

The CFTC has argued that the states have no regulatory control over prediction-market platforms, with the commission in February filing a "friend of the court" brief in the Ninth U.S. Circuit Court of Appeals arguing that it had exclusive jurisdiction over the commodities-derivatives market, including event contracts.

Nevada, the country's gambling capital, on Friday won a temporary restraining order to prevent prediction-market platform Kalshi from offering event-based contracts related to sports, elections and entertainment.

Just a few days earlier, Arizona filed criminal charges against the parent companies of Kalshi, accusing them of operating an illegal gambling business without a license. Kalshi sent a letter to Arizona's attorney general imploring that the state withdraw the charges.

While most U.S. professional sports leagues have embraced sports gambling, which is legal in most states, some have been more wary of prediction markets and their ability to identify suspicious activity that could subject their games to manipulation and insider information.

Major League Baseball, the professional league still reckoning with its biggest betting scandal in decades, recently signed a licensing deal with Polymarket, which as the league's official prediction-markets platform will have exclusive access to its data and iconography. Polymarket also agreed to work with MLB to police baseball wagers on its platform.

States including Massachusetts and Michigan have sued Kalshi, arguing that the nascent and fast-growing industry offers illegal sports betting. Polymarket filed a lawsuit against Michigan in early March in a bid to prevent the state from enforcing its state gambling laws against the platform.

Kalshi in recent months has sued states including Arizona, Iowa and Utah to stop what it believed were impending bans. The company said its event contracts were regulated by federal jurisdiction, rather than the states.

New York Times: Kalshi, Polymarket move to stop insider trading as bill seeks to ban sports prediction markets

After two United States senators introduced a bipartisan bill on Monday aimed at banning sports futures on prediction markets, Kalshi and Polymarket, the two leading companies in the field, announced new measures to guard against insider trading on their platforms.

Senators Adam Schiff, a Democrat from California, and John Curtis, a Republican from Utah, introduced the "Prediction Markets Are Gambling Act," which, if passed and enacted, would prevent "Commodity Futures Trading Commission (CFTC)-registered entities from listing any prediction contract that resembles a sports bet or casino-style game." Traders can currently buy and sell contracts, based on predictions via markets like Kalshi and Polymarket, even in states that have not legalized sports betting. Those states include major markets such as Texas and Schiff's home state.

Prediction contracts differ from traditional sports bets in that traders are not putting their money up against "the house" as betters would with a sportsbook that sets the odds for a specific outcome. The value of prediction contracts is determined by traders. Correct predictions will cash out, but traders can also sell their contracts for a profit, like a stock.

While not directly responding to the bill's assertion that prediction markets are gambling and should be regulated as such, Kalshi and Polymarket said they will toughen and clarify guardrails against insider trading. In a statement, Kalshi said it was "launching new technological guardrails that preemptively block politicians, athletes, and other relevant people from trading in certain politics and sports markets." Polymarket announced that it had updated and clarified its rules around insider trading and market manipulation.

These prediction markets are federally regulated like financial exchanges, which means they can operate in all 50 states. Traditional sports bets are not federally regulated and are only legal in 39 states, as well as in Washington, D.C.

Schiff called prediction contracts sports betting with a different name.

"And yet, these contracts have been offered in all 50 states in clear violation of state and federal law," Schiff said in a statement. "Rather than enforce the law, the CFTC is greenlighting these markets and even promoting their growth. It's time for Congress to step in and eliminate this backdoor, which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue."

Said Curtis: "Our bipartisan legislation clarifies regulatory jurisdiction, ensuring that states can maintain their authority over sports betting and casino gaming. The Prediction Markets Are Gambling Act is about respecting states' authority, protecting families, and keeping speculative financial products out of spaces where they don't belong."

Kalshi said politicians have already been banned from trading on their own campaigns, and athletes have been banned from trading on their own performances, adding that it instituted screening systems to preemptively stop such acts from happening. Kalshi also announced that it was "adding a whistleblower functionality straight in our market page, which makes it easier for our community to flag potential violations as they go through our public trading data."

Polymarket updated its terms of use, focused on trading based on stolen confidential information, illegal tips or by those who can influence the outcome.

"These new integrity rules and pages simply articulate what we've always believed and enforced," Polymarket CEO Neal Kumar said in a social media post. "Now it's all in plain view."

Polymarket also launched "Market Integrity" pages, which offer ways for users to report suspicious activity.

Prediction markets have been on the rise under President Donald Trump's administration, with some sportsbooks launching their own in recent months. The Biden administration had banned Polymarket from operating in the U.S.

Other politicians have been critical of prediction markets.

Rep. Dina Titus, a Democrat from Nevada, said they "should not be able to circumvent state gaming laws."

This isn't the first legislation aimed at regulating prediction markets. Schiff earlier this month introduced the "DEATH BETS Act," which would prohibit any CFTC-registered entity from listing contracts on terrorism, assassination, war or an individual's death.

That bill was introduced after markets like Kalshi allowed users to trade on events like whether Iran's Ali Khamenei would be "out as Supreme Leader." Kalshi had $54 million in trading volume before it was paused, according to Schiff's office.

NBC News: Senators introduce bipartisan bill to ban sports betting on prediction markets

A new bill introduced in the Senate Monday would ban prediction markets like Kalshi and Polymarket from accepting or listing transactions related to sports events and casino-style games.

The bill, co-sponsored by Senator Adam Schiff, D-Calif., and John Curtis, R-Utah, is the first bipartisan legislation introduced in the Senate targeting the rise of sports betting on services like Polymarket and Kalshi. While traditional sports gambling is regulated by states, prediction markets utilize a different technical trading mechanism, via futures or commodity contracts, that fall under federal oversight.

"Sports prediction contracts are sports bets - just with a different name," said Sen. Schiff in a statement announcing the bill's introduction. "These contracts are currently offered in all fifty states in clear violation of state and federal law."

"It's time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue," Schiff said.

Created in 1974, the Commodity Futures Trading Commission has the exclusive right under the federal Commodity Exchange Act to regulate futures, options, and swaps for registered commodities entities. Several prediction markets, like Kalshi and Polymarket, have registered with the CFTC as a type of derivative exchange called a designated contract market.

The new bill would ban any entity registered with the CFTC from listing or making available any "agreement, contract, or transaction relating to any sporting event or athletic competition," in addition to banning similar contracts for any casino-style game like poker or blackjack.

"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," Sen. Curtis said in a statement. "The Prediction Markets Are Gambling Act is about respecting states' authority, protecting families, and keeping speculative financial products out of spaces where they don't belong."

Prediction markets have soared in popularity over the past year in the United States, seeing over $1.2 billion in total trading during this year's Super Bowl Sunday, with trading volumes for the entire week soaring past $4.5 billion.

The prediction market companies are hot commodities themselves. Last week, The Wall Street Journal reported, citing several unnamed sources, that Kalshi had secured a $22 billion valuation in its latest round of venture capital funding, while rival Polymarket is reportedly hoping to attain a similar valuation.

Both services have been jockeying for users' attention and wallets, opening free grocery stores and trading-themed bars to lure in potential clients.

However, the services have also attracted mounting scrutiny over insider trading allegations in sports and other arenas. Leading AI company OpenAI fired an employee over allegations the individual had placed bets on Polymarket tied to advance knowledge of the company's product announcements, while bets on the death of Iran's Ayatollah Ali Khamenei highlighted the use of prediction markets in war and raised questions about national security risks.

On Thursday, Major League Baseball announced a new partnership with Polymarket and the CFTC "to create clear boundaries with the goal of mitigating risk while providing fan engagement opportunities."

CNBC: Prediction markets' new insider trading restrictions aren't enough, bipartisan senators say (Full interview)

A pair of bipartisan senators on Wednesday said they won't drop their push to ban sports prediction market contracts, despite Kalshi and Polymarket announcing new insider trading restrictions on their platforms.

"It's got to be more than an aspirational statement by these companies," Sen. Adam Schiff, D-Calif., told CNBC's "Squawk Box" when asked about those platforms' self-imposed new rules.

Kalshi on Monday said it would preemptively block politicians, athletes and "other relevant people" from betting on their own campaigns or sporting events.

The same day, Polymarket announced it would impose its own guardrails to address insider trading and market manipulation.

The new restrictions came as Schiff and Sen. John Curtis, R-Utah, introduced legislation that would give states, rather than federal regulators, control over sports betting and casino-style games.

The bill would prohibit Commodity Futures Trading Commission-registered entities from listing any such prediction contract.

In a joint CNBC interview Wednesday morning, the senators said the companies' efforts to police themselves are insufficient.

"I don't think it's enough," Schiff said. "It's one thing to say, 'This is our policy.' It's another actually to put into place the steps to make sure it's not happening on those platforms."

Curtis has said his bill with Schiff, the Prediction Markets are Gambling Act, is about "keeping speculative financial products out of spaces where they don't belong."

"You have to ask, 'What could go wrong?'" he said on CNBC. "Imagine betting on a high school athlete getting hurt the day of a high school game … You can see how wrong that could go."

Kalshi criticized the bill, saying in a statement to CNBC that banning sports on prediction markets would "just push this behavior offshore, where no regulation exists."

"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," Kalshi said Wednesday. "We should let competition run its course instead of protecting monopolies."

Schiff warned about the potential for "vast amounts of insider trading" that can't be addressed under current regulations. He pointed to recent reports that some bettors have amassed significant sums predicting events in the Iran war with extremely high accuracy.

"That's heavily suggestive of insider trading, and when it could be done using blockchain, there is no way to really regulate that, at least it's not being regulated today," he said.

Kalshi spokeswoman Elisabeth Diana told CNBC in an email that the restrictions announced Monday "go beyond what the stock market does."

"We also have a track record of policing insider trading," she said, pointing to Kalshi's enforcement of its existing insider-trading rules after an employee of YouTube star MrBeast was found to have traded on the outcomes of the celebrity's videos.

"That's not aspirational, that's the system at work," Diana said.

The spokeswoman also noted that the Iran war bets referenced by Schiff occurred on Polymarket, not Kalshi. "We believe that regulated, federal oversight of prediction markets is better than a patchwork of inconsistent state laws," she said.

Polymarket did not respond to a request for comment.

Prediction markets, which allow users to quickly and easily wager on nearly anything, have become vastly more popular and accessible in recent years. That popularity is leading to increasing criticism across the political spectrum.

"Pervasive gambling is not good for society," Rep. Alexandria Ocasio-Cortez, D-N.Y., said last week in response to Polymarket being made the exclusive prediction market exchange partner for Major League Baseball.

At the same time, the financial impacts of widespread betting are coming under increased scrutiny. Economists from the Federal Reserve Bank of New York said in a report Wednesday morning that sports betting "can have dramatic implications for household financial stability."

"Even though the share of people taking up sports betting after legalization is small (roughly 3 percent of the population), overall credit delinquency rises by about 0.3 percentage points," the Fed researchers said.

While any legislation faces a difficult path in Congress, Schiff and Curtis expressed optimism that their bill has enough bipartisan support to clear the House and Senate.

"I think this is one of those areas where we agree on so much more than we disagree, and I think those areas of disagreement are getting narrower and narrower," Curtis said.

NBC Sports: Bipartisan bill would ban prediction markets for sporting events

The Wild West of legalized sports wagering has been complicated by the rise of prediction markets, which have crept into the sports betting turf.

A new Congressional bill - bipartisan, amazingly - would keep prediction markets out of sports.

Via Krystal Hur of the Wall Street Journal, Senators Adam Schiff (D-Cal.) and John Curtis (R-Utah) will introduce on Monday legislation that would "prohibit entities regulated by the Commodity Futures Trading Commission, including prediction-market exchanges Kalshi and Polymarket's U.S. platform, from listing contracts related to sporting events."

The bill would also prohibit "casino-style games" from appearing on prediction-market platforms.

"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," Curtis said.

It comes at a time when the CFTC and the various states are grappling over the potential regulation of prediction markets. Last week, Arizona filed criminal charges against Kalshi for operating an illegal gambling business. On Friday, Nevada secured a temporary restraining order against Kalshi, preventing it from offering "event-based contracts" regarding "sports, elections and entertainment."

The current sports betting industry emerged from a successful attack on federal legislation that prevented states (other than Nevada) from legalizing gambling. In May 2018, the Supreme Court found that the states have the right to allow gambling, if they choose.

Major League Baseball announced on Thursday a deal with Polymarket. Obviously, that arrangement becomes far less valuable, or relevant, if the proposed legislation becomes law.

It's shaping up to be a big-money battle between the Coke-and-Pepsi companies that dominate sports betting (DraftKings and FanDuel) and prediction markets (Kalshi and Polymarket). Which makes sense, because the whole thing is about money.

Specifically, it's about coming up with ways to take as much of it as possible from people who delude themselves into thinking that they can make easy money against companies whose billions come from the simple fact that most people lose.

ESPN: Bill introduced seeks to ban sports bets on prediction markets

A bipartisan Senate bill introduced Monday seeks to ban prediction markets from allowing transactions that mimic sports betting. The bill's Republican and Democrat sponsors said they want federal law regarding prediction markets to clearly delineate which regulatory powers belong to states as opposed to the federal Commodity Futures Trading Commission.

The new bill adds to growing efforts at the state level to clamp down on prediction markets. Last week, a Nevada judge temporarily blocked industry leader Kalshi from offering sports-related event contracts, while state prosecutors in Arizona filed illegal-gambling criminal charges against the company.

The Trump administration has defended prediction market companies, which argue that their products are similar to trading stocks or commodities, putting them under CFTC jurisdiction. Chairman Mike Selig has repeatedly defended the CFTC's sole regulatory authority over prediction markets.

The new legislation, dubbed "The Prediction Markets Are Gambling Act," is sponsored by Sens. John Curtis, R-Utah, and Adam Schiff, D-California. It would amend federal law so that "sports and casino-style event contracts" may not be offered on platforms regulated by the commission.

Tarek Mansour, Kalshi's co-founder, reacted to the legislation on social media platform X, writing that it was the "casino lobby hard at work. … Banning just pushes this offshore, where no regulation exists. This bill isn't about protecting consumers; it's about protecting monopolies."

Mansour, among others, describes contracts offered on prediction markets as commodity market swaps, which only the federal government may regulate. But several states are challenging that premise in court, arguing that this is a form of gambling and, therefore, subject to state regulation.

On March 16, Arizona became the first state to bring criminal charges against Kalshi. State prosecutors filed a 20-count complaint in Maricopa County accusing Kalshi of accepting illegal bets on sports and elections in violation of state laws.

On Friday, a Nevada district court granted state gaming regulators a 14-day temporary restraining order against Kalshi. The next hearing in the case is scheduled for April 3.

A class action complaint filed on March 20 in Georgia named Kalshi and its co-founders, Mansour and Luana Lopes Lara, as defendants, claiming that they listed sports event contracts in "bad faith with full knowledge of these illegalities."

Despite the regulatory battle, business is booming for prediction markets. Last week, Major League Baseball announced a partnership with Polymarket and signed an information-sharing agreement with the CFTC. Reportedly, Kalshi has also raised $1 billion in new financing.

Kalshi on Monday announced new guardrails targeting insider trading and market manipulation on its platform. The company said it will preemptively ban athletes, employees and referees involved in college and professional sports from trading in certain markets.

Polymarket also instituted its own set of bans and rules. The company rewrote its rules to say clearly that users cannot trade on contracts where they might possess confidential information or could influence the outcome of an event. This would include athletes but could also include company officials, policymakers or anyone who would have enough influence to affect the outcome of an event or know the information in advance.

Sacramento Bee: CA Sen. Schiff pushes bill to ban sports betting on online prediction markets

California Sen. Adam Schiff is spearheading a bipartisan effort to prohibit prediction markets from allowing sports betting.

The legislation, introduced Monday, seeks to stop the federally regulated platforms from allowing wagers that resemble a sports bet or casino-style game. These platforms, or online prediction markets, have surged in the past year. They offer yes or no wagers tied to sports, politics and pop culture.

Schiff, who proposed the bill alongside Sen. John Curtis, a Republican from Utah, called these sports prediction contracts merely sports bets "with a different name."

"And yet, these contracts have been offered in all fifty states in clear violation of state and federal law," Schiffsaid in a statement. "It's time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue."

The bill comes as states are trying to grapple with the explosion of prediction markets, like Polymarket and Kalshi. The markets are regulated by the Commodity Futures Trading Commission, whichSchiff said is "greenlighting" and promoting their growth.

Last week, a judge in Nevada dealt a temporary ban to Kalshi for certain event-based bets. The state of Arizona also filed criminal charges earlier in the month against Kalshi, accusing it of operating an illegal gambling business.

Last week, Major League Baseball announced a multi-year deal with Polymarket to make it the league's official and exclusive prediction market exchange partner.

The Guardian: Bipartisan Senate bill would ban sports betting on online prediction markets

Prediction markets are facing fresh bipartisan scrutiny in the US Senate as companies such as Kalshi and Polymarket continue to battle state-led efforts to regulate online betting.

A bill was introduced in the US Senate on Monday that would ban federally regulated platforms from allowing wagers on sporting events, what would be a huge blow to marketplaces where billions of dollars have been traded on major events like the Super Bowl and the NCAA's March Madness.

The bill follows several other state-level efforts to regulate marketplaces, which are overseen by a federal agency. On Friday, a Nevada judge temporarily banned most of Kalshi's operations in the state for two weeks after the state filed a lawsuit against the company.

Online prediction markets are currently regulated by the Commodity Futures Trading Commission (CFTC). Under the Trump administration, the agency has argued it has exclusive regulatory control over the companies.

Adam Schiff, a Democratic senator from California who introduced the bill with John Curtis, a Republican senator from Utah, said in a statement that the CFTC is "greenlighting these markets and even promoting their growth".

"Sports prediction contracts are sports bets - just with a different name." Schiffsaid in a statement. "It's time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue."

The bill also bans casino-style games such as virtual poker, slot machines and blackjack from being available on the platforms. Curtis said in a statement that "addictive sports betting and casino-style gaming contracts" belong "under state control, not under federal regulators".

In response to the bill, Kalshi said in a statement: "Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists."

"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," the company said. "Sports trading on regulated prediction markets offer a fairer choice to consumers, with no house that restricts winners and hooks people the more they lose."

Polymarket and the CFTC did not immediately respond to a request for comment.

Sports betting was largely illegal in the US until 2018, when the supreme court struck down a 1992 federal law banning commercial sports betting in most states. Since the ruling, newer prediction markets that have fewer age limits and events restrictions are gathering steam and seeing hundreds of millions of dollars in trading volume each week.

These platforms allow users to bet on any event, from Oscar winners to ongoing military conflicts. Polymarket has also started to deem itself a source of news, though a New York Times analysis found that the company has posted hundreds of false and misleading posts on its social media feeds.

Much of the regulatory pushback has been from the states. Last week, Arizona's attorney general filed criminal charges against Kalshi, accusing the site of election wagering and running an illegal gambling business without a license.

"Kalshi may brand itself as a 'prediction market,' but what it's actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law," said Kris Mayes, Arizona's attorney general. "No company gets to decide for itself which laws to follow."

Nevada last month sued Kalshi arguing that the company needs to be licensed in the state for wagering activity. On Friday, a Nevada judge dealt the state a brief win with a temporary restraining order that bans the company from operating in the state until its next hearing on 3 April. The judge said Kalshi cannot offer event-based contracts related to sports, elections and entertainment and prohibited users under 21 years old from using its platform.

"Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public. We want people in the state to wager safely at a licensed book," said Mike Dreitzer, chair of the Nevada gaming control board, in a statement.

The Hill: New bill targets sports prediction markets: What are they, and why could some be banned?

(NEXSTAR) - As sports betting continues to grow in the U.S., one large aspect of the industry could take a hit under a new bipartisan bill.

Introduced by Sens. Adam Schiff(D-Calif.) and John Curtis (R-Utah) on Monday, the "Prediction Markets are Gambling Act," bill would target a single aspect of the broad gambling option.

The concern, according to the lawmakers behind the legislation, is that these prediction markets are bypassing state and federal laws to offer illegal wagering.

Here's what to know.

What are prediction markets?

Prediction markets are almost exactly what they sound like.

Users are able to make bets on nearly anything. Kalshi, one of the largest prediction market platforms, allowed bets on the references President Trump would make during his State of the Union last month, for example.

As of Tuesday afternoon, Kalshi's live markets include various sporting events, as well as what the price of Brent crude oil would be at 5 p.m. ET, the outcome of a special election in Florida, when DHS funding will be approved, and Los Angeles' highest temperature of the day.

You can find similar offerings on the platform Polymarket, including markets regarding whether the U.S. confirms aliens exist, if Jesus will return before 2027, and how frequently Elon Musk posts to X this week.

The markets are simple to wager on. In most cases, you're picking a winning team or between "yes" and "no" outcomes, which are known as contracts. You determine how much you want to wager, with the price usually based on the anticipated probability from the market (they typically range up to 99 cents, representing the projected outcome in percentage). The payout can vary based on the contract type, but the most common is winner-take-all.

Both Kalshi and Polymarket have signed business deals with several sports teams and leagues in order to bolster their credibility with sports fans.

What would the Prediction Markets Are Gambling Act do?

Should the bill pass, entities like Kalshi and Polymarket that are regulated by the Commodity Futures Trading Commission would be prevented from allowing wagers on sports games and events typically found in casinos, The Hill previously explained.

The prediction contracts available on these sites "are sports bets - just with a different name," Schiff said in a statement.

However, prediction market platforms have argued they are more akin to commodity exchanges or "swaps" than gambling operations.

"If we are gambling, then I think you're basically calling the entire financial market gambling," Kalshi CEO Tarek Mansour told Axios last year.

Some states have taken action

Several states have preemptively banned Kalshi and Polymarket, saying that the platforms effectively are a sports betting industry with a technological twist.

Earlier this month, a judge in Nevada blocked Kalshi from operating in the state after gaming regulators argued that "futures trading" by the company and others like it is really just sports betting. Those operations are subject to regulations in the state, while prediction markets remain illegal in Nevada, according to officials.

Days earlier, Arizona became the first state to file charges against Kalshi, with the attorney general accusing the company of operating an illegal gambling business, according to NPR.

In Utah, Governor Spencer Cox has signed legislation that would add wagers on "prop bets" - typically, things that may happen during a sporting event rather than its outcome - to its list of banned gambling activities. Kalshi sued the state over the bill before Cox signed it.

Judges have ruled in Kalshi's favor in New Jersey and Tennessee, but in favor of Nevada and Massachusetts in similar cases. In Ohio, a federal judge recently instructed Kalshi to adhere to state regulations on gambling.

What else is there to know?

Kalshi and Polymarket have found backing from the Trump-controlled Commodity Futures Trading Commission, the federal regulator of derivatives and other prediction markets activities. The CFTC's chairman, Michael Selig, has said he would back Kalshi in any of its legal battles at the state level, arguing that federal law preempts any state law on this issue.

Any friendly decision the CFTC makes on this industry could end up financially benefiting the president's family as well. President Trump's son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic adviser for Kalshi.

Kalshi and Polymarket instituted new guardrails and surveillance tools on Monday. Kalshi said it would ban political candidates from trading on their own campaigns, and it would preemptively block anyone involved in college or professional sports from trading contracts related to the sports they play or are employed by.

Polymarket rewrote its rules to say clearly that users cannot trade on contracts where they might possess confidential information or could influence the outcome of an event. This would include athletes but could also include company officials, policymakers or anyone who would have enough influence to affect the outcome of an event or know the information in advance.

HuffPost: Lawmakers Eye Bipartisan Crackdown On 'Prediction Market' Gambling

WASHINGTON - America's big online gambling boom has finally caught Congress' attention.

Republicans and Democrats have introduced multiple proposals, including several just this week, to outlaw "prediction market" betting on sports and also on world events.

The proliferation of online betting started with a 2018 Supreme Court decision striking down a federal law barring bets on professional sports. In the eight years since, the amount Americans bet on sports annually has exploded from $7 billion to $167 billion, according to the industry, while since last year prediction markets have expanded wagering from sports to elections and even wars.

Some members of Congress have seen enough. Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah) introduced legislation on Monday targeting prediction markets for sports just days after Major League Baseball and Polymarket announced a gambling deal with full blessing from President Donald Trump's administration.

"This is just spiraling out of control. And I think on a very bipartisan basis, there is a tremendous amount of concern about where this is heading, how easily it can be manipulated, how vast the expansion will be of gambling," Schiff told HuffPost.

Prediction markets are still a small part of an industry that preys on addictive behavior, however, and lawmakers have shown little appetite for a direct attack on the betting companies that have taken over pro sports and already spawned shocking corruption scandals in the MLB and NBA.

The Schiff-Curtis bill follows similar legislation introduced last week by Sen. Chris Murphy (D-Conn.) and Rep. Greg Casar (D-Texas) to ban wagering on events where someone knows or controls the outcome. The bill was inspired partly by suspicious bets on platforms like Kalshi and Polymarket that seemed to anticipate U.S. actions in the Iran war. Another piece of bipartisan legislation, introduced Tuesday in the House, would restrict federal government officials from participating in prediction markets.

"There's just been instance after instance where people in my community and folks all throughout this building go, 'Isn't that already illegal? Like, How is this even possible?'" Casar told HuffPost.

Under Trump, the Commodity Futures Trading Commission, a financial regulator that oversees derivatives markets, has allowed companies like Kalshi to circumvent state sports gambling restrictions by selling prediction market "event contracts" that pay out based on opposing wagers for a given outcome - such as who wins a sports game or whether Iran's supreme leader is ousted by a certain day.

A spokesperson for Kalshi said the company was fine with legislation banning government officials from trading markets, but it opposes the Schiff-Curtis proposal.

"It's clear this bill is motivated by casino interests that are threatened by competition," the Kalshi spokesperson said in an email. "They're more worried about protecting their monopolies than protecting consumers."

It's true that the bills restricting prediction markets would benefit the incumbent gambling industry. Steven Light, a gambling law expert and visiting professor at the University of Nevada law school, listed five potential winners of a Kalshi crackdown: casinos, state-regulated betting platforms like DraftKings or FanDuel, Native tribes that allow gaming, revenue-losing state governments, and scandal-plagued sports leagues.

"Major league sports and the NCAA are struggling to contain these sports wagering scandals, to figure out how to deal with game and player and even student-athlete integrity and betting on your own performance and that kind of thing," Light said, adding that the novel prediction markets compound existing problems presented by state-regulated gambling.

The Trump CFTC's interpretation of the Commodities Exchange Act, in which the agency has awarded itself control of sports event contracts indistinguishable from regular gambling, strays wildly from what lawmakers intended when they last updated the law in 2010. It's triggered a wave of lawsuits and explains why members of Congress are so willing to write bills. The agency has essentially taken away the power states won from the 2018 Supreme Court decision to regulate sports betting.

"That whole business is a major affront to my state," said Curtis, who hails from Mormon-dominated Utah, where the state Constitution prohibits all forms of gambling. "It's a core Utah value. And so clearly, I'm very concerned if they try to take that regulating ability away."

Another Utah Republican, Rep. Blake Moore, cosponsored a bipartisan bill earlier this month to disallow prediction markets in sports, wars, assassinations and terrorist attacks.

So far, lawmakers seem unwilling to seize the moment to go after regular, state-sanctioned sports gambling. A bill by Rep. Paul Tonko (D-N.Y.) and Sen. Richard Blumenthal (D-Conn.), to curb gambling advertisements, limit customer deposits and disallow "bonus bets," has zero co-sponsors. Tonko told HuffPost he hopes the interest in prediction markets will lead to more interest in the underlying issue.

"I think it's a public health crisis that needs to be addressed," Tonko said. "The targeting of young people who are most vulnerable to bet on these sports teams and sports events has grown expeditiously over that short period of time. It's not even a decade, you know, and already we've seen consequential damage."

As the Public Health Advocacy Institute noted in a lawsuit this week against the major online sports gambling companies, the American Psychiatric Association in its diagnostic manual lists "gambling disorder" in the same category as addiction to heroin, cocaine and tobacco. One recent study found consumer finances worsened in states that rolled out legalized sports gambling since 2018.

There may be more legislation on the horizon. Sen. Brian Schatz (D-Hawaii) said in December he was working on a bill to clamp down on prop betting during games. He told HuffPost this week the bill's not ready yet.

Despite the bipartisan interest in curbing prediction markets, it's not clear how soon Congress could act. The various bills aren't getting votes or even hearings anytime soon. Lawmakers still haven't even gotten around to curbing Big Tech's use of addictive algorithms to hook children on social media, despite an array of popular bipartisan proposals. But the day could come, and the companies involved are clearly on notice - Kalshi and Polymarket said this week, amid the flurry of new proposals, that they would take steps to curb insider trading.

"People are still really wrapping their heads around how omnipresent this is in American life," Schiff said. "This is all being done, really, without any thought, and by virtue of a not even a workaround - an end run around the law by calling sports betting something else, calling it a prediction event contract instead. That's just completely unacceptable, and Congress really needs to act."

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