US Senate Bipartisan Bill Looks to Ban Sports Predictions

Another day, another threat emerges for prediction markets.

US Senators Adam Schiff (D-CA) and John Curtis (R-UT) introduced the Prediction Markets Are Gambling Act into the chamber on Monday. The bill would ban sports prediction markets, as well as any casino-style games. All forms of sports betting remain illegal in both of the lawmakers’ home states.

“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 shared in a statement. “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.”

If passed, the proposal would amend the Commodity Exchange Act to enact the changes. This would close the legal loophole the industry has used to offer sports contracts without state taxes or oversight. 

While a growing number of lawsuits aim to achieve the same goal, the Senate bill would take the decision out of the hands of the US court system.

The White House is expected to fight the bill, but early bipartisan support makes its passage a real possibility. California and Utah don’t often share political stances, showing the issue of prediction markets may no longer be a partisan fight. 

CFTC Regulation Talk Doesn’t Ease Concerns

The bill’s introduction comes on the heels of regulation talks from new CFTC chairman Michael Selig. While he made it clear that the federal regulator would back the prediction industry, he also promised to impose additional regulations. That includes around controversial markets and those that could be easily manipulated. 

While Selig’s goal was to ease concerns over the integrity of prediction markets, it largely failed to do so. That was due to his decision to allow operators to self-regulate, with no firm promises of severe penalties for violators. 

Without the fear of federal oversight, there is little reason for prediction markets not to test the limits of their new power.

There is no guarantee the Senate bill will become law, but its introduction at least serves as a warning that the CFTC’s recent promises aren’t enough.