In a direct challenge to the growing trend of financialized wagering, U.S. Representatives Steven Horsford (D-Nev.) and Mark Amodei (R-Nev.) have officially introduced the Prediction Markets Are Gambling Act. Unveiled on Thursday, July 23, 2026, this bipartisan legislation seeks to shut down a federal loophole that allows financial trading platforms to offer sports betting and casino-style games under the guise of federally regulated financial products.
For months, platforms like Kalshi and Polymarket have expanded their offerings by framing wagers as "event contracts". Bettors buy "yes" or "no" shares on whether a specific outcome—such as a team winning a championship, a player hitting a statistical milestone, or an election result—will occur. Because these platforms operate under the regulatory umbrella of the federal Commodity Futures Trading Commission (CFTC), they effectively bypass the stringent licensing requirements, gaming taxes, and consumer protections required of traditional sportsbooks.
What is the Prediction Markets Are Gambling Act?
Designated as H.R. 9856, the newly introduced legislation would amend the Commodity Exchange Act to explicitly prohibit federally regulated prediction exchanges from listing event contracts tied to sports and casino games. The bill provides clear legal parameters for what constitutes a "sporting event or athletic competition," covering amateur, collegiate, and professional sports, as well as virtual contests involving physical activity or skill.
Furthermore, the legislation defines a "casino-style game" as any game traditionally found on a casino floor, including slot machines, video poker, blackjack, roulette, craps, bingo, and lotteries. By establishing these definitions, lawmakers aim to draw a hard line between legitimate commodity trading and unlicensed gambling.
The core argument behind the legislation is straightforward: if an activity looks and operates like gambling, it should be subject to traditional sportsbook regulations. Representative Horsford emphasized that state governments and tribal authorities have historically managed gaming policy, not unelected federal financial regulators. By offering unregulated wagers disguised as financial derivatives, these platforms are threatening the heavily regulated gaming industry.
Closing the Multi-Billion Dollar Loophole
The financial impact of unregulated sports betting prediction markets is staggering. Lawmakers estimate that states have already lost over $1 billion in gaming tax revenue—funds that would typically support public schools, infrastructure, and critical social programs. Unlike licensed sports betting operators that pay significant state and federal taxes, prediction markets exploit their status as financial exchanges to avoid these obligations.
When platforms offer Kalshi sports contracts or facilitate Polymarket sports betting, they operate on a different financial model than standard bookmakers. Prediction markets frequently argue that they do not qualify as gambling entities because they do not take a side on the wager; instead, they make money by charging transaction fees, regardless of whether bettors win or lose. However, gambling industry advocates and state regulators view this as unlicensed bookmaking that undermines the integrity of local gaming markets.
Protecting Nevada Sports Betting Legislation and Casino Jobs
The push to ban CFTC sports contracts is particularly urgent for Nevada, a state where the gaming industry supports hundreds of thousands of jobs and generates more than a third of total state revenue. The Nevada Gaming Control Board has spent over a year battling prediction markets in court, attempting to block companies from operating within state lines and warning existing licensees to steer clear of prediction exchange models.
The new federal effort is heavily backed by major labor unions and industry groups. The Culinary Workers Union Local 226, which represents 60,000 hospitality workers in Las Vegas and Reno, has warned that unregulated out-of-state prediction markets put casino jobs directly at risk. The American Gaming Association (AGA) and the UNITE HERE union have also voiced strong support for the bill.
"This is about protecting jobs, protecting consumers, and protecting the integrity of our gaming industry," Horsford said in a statement accompanying the bill's introduction. He noted that Nevada has always maintained the gold standard for gaming regulations, and out-of-state tech companies should not be allowed to sidestep the rigorous oversight required of every legal operator.
The Battle Over CFTC Sports Contracts Moves Forward
The introduction of the House bill follows a companion measure introduced in the Senate earlier this year. In March 2026, Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah), alongside co-sponsor Catherine Cortez Masto (D-Nev.), launched the Senate version of the legislation. With bipartisan momentum in both chambers, the focus now shifts to the House Committee on Agriculture, which recently held hearings regarding prediction market oversight.
Supporters of the legislation argue that the CFTC's mandate is to oversee legitimate financial and agricultural commodities markets, not to act as a shadow regulator for sportsbook-style wagering. As Congress prepares to break for its summer recess, the debate over how to handle these financialized bets is reaching a boiling point.
For the average consumer, the passage of this bill would mean a complete halt to sports and casino event contracts on federal prediction exchanges. Those looking to wager on athletics would be directed back toward licensed operators that adhere to traditional sportsbook regulations, ensuring standard consumer protections and contributing to local state tax revenues. As the legislative process unfolds, the fate of these multi-million dollar prediction platforms hangs in the balance.
