Bipartisan U.S. bill would force Kalshi and Polymarket sports contracts under state gambling rules

Two Nevada representatives, Steven Horsford and Mark Amodei, have introduced the Prediction Markets Are Gambling Act, a bill that would bar platforms like Kalshi and Polymarket from offering sports event contracts unless they comply with each state’s sports betting rules. For high-risk payment businesses, the point is simple: if this becomes law, a big slice of prediction-market volume could get pushed into the same licensing, tax, and compliance framework as ordinary sportsbooks.

1. The bill would make sports event contracts off-limits for prediction platforms unless they follow state gambling regulations. Horsford said Nevada has “always been the gold standard” for gaming regulation, and argued these firms are using a federal loophole to sidestep state oversight that any legal sportsbook has to live with.
2. Kalshi and Polymarket say their event contracts are financial derivatives, not sports bets. The problem is that sports content drives a large share of activity anyway: during the 2026 FIFA World Cup, prediction markets accounted for almost 25% of all betting action on the matches.
3. If a federal ban passes, these platforms would have to strip out sports entirely and refocus on political, economic, and pop-culture event contracts. For PSPs and acquirers, that is not a cosmetic change; it changes the risk profile of the merchant, the product mix, and the regulatory story you have to defend upstream.
4. The jurisdiction fight is already split between federal and state regulators. On the federal side, the Commodity Futures Trading Commission (CFTC) has traditionally overseen prediction markets alongside financial futures such as oil or agriculture. State gaming regulators say these contracts are unregistered sports bets designed to avoid state licenses, consumer protections, and local gaming taxes.
5. Nevada is the most pointed example in the text: the state protects 185 brick-and-mortar sportsbooks and requires in-person registration for mobile apps. In that setup, unregulated prediction platforms are not a theoretical nuisance; they are a direct threat to tax revenue and physical sportsbook operations.

There is also a rare bipartisan line here. In the Senate, a companion effort is backed by Catherine Cortez Masto, a Democrat from Nevada, and John Curtis, a Republican from Utah. The states could not be more different on gambling policy, but both lawmakers are aligned on one thing: prediction platforms should not be able to operate outside local supervision.