Senators Introduce Bipartisan Bill to Prohibit Listing of Sports and Casino-Style Event Contracts
Commentary by Stephan Ariyan and Steven Lofchie
Senator Adam Schiff (D-CA) and Senator John Curtis (R-UT) introduced legislation that would prohibit CFTC-registered entities from listing or clearing event contracts involving "sports and casino-style" activities.
The "Prediction Markets Are Gambling Act" would amend the Commodity Exchange Act to prohibit any agreement, contract, or transaction relating to (i) sporting events or athletic competitions and (ii) casino-style games from being made available for clearing or trading on or through a registered entity. The legislation defines a "casino-style game" as "any game[] traditionally found in a casino, including slot machines, video poker, blackjack, roulette, craps, bingo, lottery, and any simulation of any such games."
The legislation establishes a distinction between derivatives markets regulated under the Commodity Exchange Act and contracts tied to sports or casino-style games. Under the bill, the prohibition on "sporting events or athletic competitions" is defined broadly to include "any live or virtual contest involving physical activity or skill in which individuals or teams compete, and performance determines an outcome or statistical result." This scope includes "amateur, collegiate, and professional sports."
The bill further clarifies its jurisdictional reach by including a "rule of construction" providing that nothing in the CEA shall be construed to "preempt any State law or rule that regulates or prohibits agreement[s] or contract[s] ... relating to sports or casino-style games. If enacted, the prohibition would apply to all relevant contracts or transactions entered into on or after the date of enactment.
Commentary
Congress’s push to reclassify certain event contracts reflects a jurisdictional judgment rather than a philosophical one. Lawmakers advancing the Prediction Markets Are Gambling Act appear concerned that CFTC oversight has enabled sports and casino-style contracts to be offered nationwide through a federal derivatives framework that was not designed to incorporate traditional gambling safeguards. By designating these contracts as gambling subject to state and tribal regulation, the bill seeks to realign regulatory authority with long‑standing state control over sports betting, consumer protection, taxation, and tribal gaming compacts. Viewed this way, the legislation operates less as a critique of prediction markets as a concept and more as an attempt to clarify the boundary between federally regulated derivatives and wagering activities historically policed at the state level. That said, it remains premature to conclude that Congress has reached a durable consensus around this approach.
Commentary
It is notable that the proposed legislation would not impact either contracts based on political events or contracts that have no relationship to traditional measures of value, such as who will perform at an entertainment event.
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