Congress Hits a Wall on Sports Betting and Prediction Market Legislation

Congress has spent much of the past year talking tough about sports betting and prediction markets, but the talk has not turned into law. A months-long push in Washington to impose new federal rules on both industries has stalled out, despite rare bipartisan agreement that sportsbooks and prediction market platforms have gone largely unchecked by federal regulators for too long.

Lawmakers in both chambers have criticized major operators like FanDuel and DraftKings for not doing enough to guard against corruption and game-rigging while continuing to post big profits off millions of bettors, a growing share of whom are struggling with gambling addiction. Prediction markets, meanwhile, have expanded rapidly, giving customers a way to wager on outcomes that stretch well beyond sports and into politics and the economy.

A Year of Hearings Without a Bill

The gridlock is not for lack of trying. The Senate Commerce, Science and Transportation Committee, chaired by Sen. Ted Cruz (R-Texas), held a hearing in May examining marketing practices, integrity monitoring, and consumer protection across both sportsbooks and prediction markets. Sen. Marsha Blackburn said afterward there was “interest from members on the panel to move forward and get something on the books,” but months later, no standalone bill has cleared committee.

That May hearing followed the SAFE Bet Act, introduced by Sen. Richard Blumenthal (D-Conn.) and Rep. Paul Tonko (D-N.Y.), which sought to set minimum federal standards curbing predatory practices in online sports betting and protecting younger bettors. It has yet to gain traction. More recently, the House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development held its own hearing on July 21 focused specifically on prediction markets, with Chairman Rep. Dusty Johnson arguing Congress should not stay silent while courts and regulators sort out the industry’s future on their own.

Prediction Markets Add a New Wrinkle

The prediction market fight has its own dedicated bill. Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah) introduced the bipartisan Prediction Markets Are Gambling Act in March, which would bar entities regulated by the Commodity Futures Trading Commission — like Kalshi and Polymarket — from listing sports wagers or casino-style games on their platforms. The bill remains parked in the Senate Agriculture, Nutrition, and Forestry Committee months later.

The American Gaming Association has pushed hard for that kind of restriction, arguing prediction markets are functioning as unregulated, nationwide sportsbooks that skirt the licensing and consumer protections states require of traditional operators. Prediction market platforms counter that their sports-related contracts are financial derivatives, not wagers, and should stay under CFTC oversight rather than state gambling law. The CFTC itself has stayed largely on the sidelines of that jurisdictional fight, even as it faces lawsuits from multiple states and tribal gaming operators trying to shut prediction markets out of their markets entirely.

Why Nothing Is Moving

Analysts tracking the space say the stalemate may actually suit the industries being scrutinized. TD Cowen policy analyst Jaret Seiberg noted that prediction market operators have little incentive to see Congress act at all, since inaction has effectively let them keep operating nationwide while the CFTC’s own rulemaking process grinds on. With federal elections looming in November, most observers now consider a standalone bill unlikely before year’s end, though a narrower provision could still get folded into a larger legislative package.

For now, the fight over how — or whether — sports betting and prediction markets get reined in is playing out mostly in courtrooms rather than committee rooms, with state attorneys general, tribal gaming groups, and platforms like Kalshi and Polymarket litigating jurisdiction state by state. Congress has shown it can hold a hearing. Turning that into a federal standard remains the much harder part.

Bettors weighing where to place a wager in the meantime can still compare legal, state-regulated options like a DraftKings promo code against newer platforms entering the conversation, even as regulators sort out where prediction markets fit. Anyone curious how the two products actually differ can dig into the fundamentals in this prediction markets vs. sports betting breakdown.