what’s at stake
As prediction markets grow in popularity and Washington influence, lawmakers in both parties are talking more seriously about how to regulate them.
Democrats, and a few Republicans, have introduced various bills that would ban sports betting on platforms like Kalshi and Polymarket; prevent federal lawmakers and senior executive branch officials from placing bets on them; and prohibit bets on events like deaths and war.
But the road to any legislative action is a complicated one, in part because of how many proposals are already competing to establish rules around these betting platforms.
The Trump administration, meanwhile, has taken the side of prediction markets in legal battles with states. Earlier this year, Commodity Futures Trading Commission Chair Mike Selig intervened in several cases in which state and local regulators accuse prediction markets of violating state gambling laws.
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who’s making the case
Sen. Catherine Cortez Masto, D-Nev., a member of the Banking Committee, said she wants legislation that affirms the authority of states to rein in the platforms:
“I think we’ve got to respect states’ rights first when it comes to sports betting, wagering, gambling. The states have a role to play, and that is the gold standard of that regulation, and we shouldn’t be preempted by federal regulation. In the past, traditionally, it has been the CFTC working in conjunction in the states to regulate. The current chair of the CFTC doesn’t believe that anymore, thinks that there should be federal preemption for states’ rights. I disagree. I’ve introduced legislation to take it out of his authority altogether.”
Sen. Chris Murphy, D-Conn., who introduced his own bill to ban prediction markets betting on events like government actions, war, and terrorism, said any regulation has a “slim to none” chance of passing this Congress:
“I think we need to build a grassroots constituency around ending these corrupt prediction markets, but Donald Trump’s family is completely integrated and making money off of Kalshi and Polymarket, so my guess is that he will not let Republicans support any legislation that trims his corruption sales.”
Sen. Ron Johnson, R-Wis., a member of the Senate Finance Committee, said Congress shouldn’t move to regulate betting markets:
“I generally don’t like government regulation. … Government does enough things bad.”
Notable
- Prediction markets won over President Donald Trump — but the rest of Washington will be harder, Semafor’s Eleanor Mueller reported.
- Kalshi is barring athletes and coaches from betting on their sports and preventing politicians from trading on their campaigns, Axios reported.
- Rep. Seth Moulton, D-Mass., announced this week that he would ban his congressional staff from betting on prediction markets.
- Donald Trump Jr. is an investor in Polymarket and a paid adviser for Kalshi, according to The New York Times.