Representatives Steven Horsford and Mark Amodei have introduced bipartisan legislation seeking to prohibit federally regulated prediction markets from offering contracts tied to sports betting and casino-style games.
The Prediction Markets Are Gambling Act would amend the Commodity Exchange Act to prevent entities registered with the Commodity Futures Trading Commission (CFTC) from listing such contracts. Weather, economic and other event contracts used for legitimate hedging would remain within the federal derivatives framework.
The House proposal accompanies legislation introduced in March by Senators Adam Schiff and John Curtis, with Senator Catherine Cortez Masto also supporting the measure. The Senate bill was the first bipartisan proposal in that chamber specifically seeking to restrict sports contracts offered by prediction markets.
The legislation comes amid an escalating dispute over whether prediction market platforms fall under federal commodities regulation or state gambling laws.
The debate has intensified over the past year as Kalshi expanded into sports event contracts and Polymarket prepared for a return to the US market, prompting legal challenges from state regulators and tribal gaming groups.
Federal and state authorities have taken opposing positions in several cases. The Commodity Futures Trading Commission (CFTC) has argued that federally regulated event contracts fall within its jurisdiction under the Commodity Exchange Act, while gaming regulators in states including Nevada, New Jersey, Massachusetts and Michigan have maintained that sports event contracts function as sports betting and should be licensed under state gaming laws.
Supporters of the legislation say the bill would resolve that jurisdictional dispute by explicitly excluding sports betting and casino-style contracts from federally regulated prediction markets while preserving the CFTC's oversight of genuine financial hedging products, including weather and economic contracts.
Horsford said: "These companies are exploiting a federal loophole that allows them to effectively sidestep state oversight that every other legal sportsbook must follow. They've already cost states over $1 billion in lost gaming tax revenue."
Amodei said: "Gaming policy has long been the responsibility of states and tribes, not unelected federal regulators. This bipartisan bill closes a federal loophole that allows sports betting to masquerade as financial trading."
The proposal has also received backing from the American Gaming Association, UNITE HERE and Nevada's Culinary Union, all of which argue that expanding prediction markets threaten state gaming tax revenues, tribal sovereignty and employment within the regulated casino sector.
The legislation would also state explicitly that nothing in federal law preempts state or tribal authority over gambling regulation, while avoiding what lawmakers describe as years of additional CFTC rulemaking and potential litigation.
The bill follows continuing legal battles over prediction markets. In June, Polymarket sued Minnesota Governor Tim Walz and Attorney General Keith Ellison after the state enacted legislation prohibiting certain event contracts.
Both Kalshi and the CFTC also challenged the law, arguing that federally regulated event contracts are preempted by federal commodities legislation.
The American Gaming Association estimates regulated commercial gaming generated more than $72bn in US revenue during 2025, with sports betting contributing record tax receipts for state governments
