Congress is moving on multiple fronts to restrict prediction markets, with lawmakers introducing at least two distinct bipartisan bills within days of each other.
One Senate measure, reported exclusively by Axios, would ban prediction markets outright on sports, politics and military events for all participants. A separate bill, covered by Politico and Forbes, would prohibit members of Congress, the president and executive branch officials from trading on political event contracts, targeting the conflict-of-interest risk that arises when officeholders can wager on outcomes they help shape.
The legislative activity follows Kalshi's own preemptive move to block athletes and politicians from trading on its platform, a concession the company announced ahead of the congressional push. Kalshi has been at the centre of the prediction market expansion after winning a legal battle against the Commodity Futures Trading Commission that allowed it to list election contracts.
The bills address two overlapping concerns. The first is structural: prediction markets on political and military outcomes create obvious information asymmetries, since officials with non-public knowledge can trade on events they influence or anticipate. The second is social: legislators and regulators have questioned whether wrapping sports betting inside a federally regulated derivatives framework sidesteps state-level prohibitions on gambling.
The CFTC, which regulates event contracts under the Commodity Exchange Act, has so far taken a permissive stance toward prediction markets following the Kalshi ruling, but congressional action could force a harder boundary. How broadly any final legislation is drawn, and whether it survives conference, remains to be seen given the competing bills now in circulation.
