US Congress: Kalshi and Polymarket Threaten the Betting Regulatory System

^{Pictured: Senator Catherine Cortez Masto}

The proposal by prediction platforms such as Kalshi, Polymarket, and Robinhood to offer contracts on sporting events has sparked concern in the US Congress, InGame reports. Senators Catherine Cortez Masto and John Curtis submitted a letter to the Commodity Futures Trading Commission (CFTC), warning that such practices pose risks to the states’ gambling regulatory framework.

Kalshi and similar companies brand themselves as prediction markets rather than gambling operators. On that basis, they are regulated federally by the CFTC rather than at the state level, unlike traditional sportsbooks.

Until recently, prediction platforms focused primarily on political, social, and cultural events. Their move into sports outcomes, however, has heightened their resemblance to conventional bookmakers.

Cortez Masto and Curtis argue this undermines the authority of states and tribal nations, which are empowered to regulate betting activity within their jurisdictions.

Unlike licensed sportsbooks, Kalshi and other platforms operate without gaming licenses yet promote their services as available nationwide — despite sports betting being legal in only 38 states and the District of Columbia.

Another concern is that prediction platforms, unlike licensed bookmakers, do not verify customer age or enforce responsible gambling safeguards.

“This undermines the sovereign authority of states and tribes to regulate gambling within their jurisdictions and risks federalizing an area of law that the Supreme Court has deemed reserved for the states,” the senators’ letter states.

Kalshi’s similarities to bookmakers have already led to disputes with regulators and tribal entities in five states.