Utah Sen. John Curtis is spearheading a bipartisan effort to crack down on loopholes used by prediction markets to circumvent state laws that ban sports betting.
Curtis, alongside California Sen. Adam Schiff, introduced the “Prediction Markets Are Gambling Act” on Monday to prohibit prediction markets registered under the Commodity Futures Trading Commission from listing any sports-related prediction contracts or casino-style games. The proposal comes after lawmakers have raised concerns that the CFTC has opened a back door for prediction markets to solicit gambling by disguising themselves as investments.
“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 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.”
The legislation comes as lawmakers such as Curtis argue that companies use these workarounds to evade state gambling laws, including in Utah, where the practice is illegal. The bill would also crack down on prediction markets that have managed to avoid consumer protections and taxes due to the lack of oversight.
Although it’s illegal in Utah, some markets such as Kalshi have established loopholes by allowing traders to buy and sell contracts tied to specific outcomes. That way, the practice is framed as an investment but serves the same purpose as gambling — without needing to use platforms such as FanDuel, which are banned.
The contracts have rapidly grown in recent years. For example, one March Madness winner contract has already ballooned to more than $100 million in trading volume, according to Curtis’ office. A similar contract for the Super Bowl surpassed $1 billion earlier this year.
“Sports prediction contracts are sports bets — just with a different name. And yet, these contracts are currently offered in all fifty 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.”
In essence, the legislation would reinforce the original intent of the Commodity Exchange Act to ban sports gambling and remove any ambiguity in the statute currently being used to circumvent state laws.