Rep. Dina Titus’ bill preventing prediction markets from writing event contracts on sporting events is still awaiting a committee hearing more than a month after she introduced the legislation.
The Fair Markets and Sports Integrity Act, introduced Feb. 10, would prohibit prediction markets like Kalshi and Polymarket from writing event contracts involving the outcome of sporting events.
Titus, D-Nev., and gaming regulators nationwide argue sports-related event contracts are a form of wagering that is illegal unless an entity is licensed by a state gaming regulator.
The Nevada Gaming Control Board has been battling prediction markets in Nevada for a year. It first issued a cease-and-desist letter to Kalshi in March 2025 after it offered contracts online to customers.
Kalshi has contended that it should be allowed to write contracts because it is overseen by the federal Commodity Futures Trading Commission that holds greater standing than state gaming regulators.
Prediction market sports event contracts are yes-or-no propositions that give the buyer an opportunity to capitalize financially if the buyer’s prediction is correct.
Prediction markets explained
A congressional analysis of prediction markets described it like this: A trader who buys a “Yes” contract may receive a payout of $1 if the underlying event occurs before the contract’s expiration date, but nothing if the event does not occur before that date. Conversely, a trader who purchases a “No” contract may receive a payout of $1 if the underlying event does not occur before the contract’s expiration date, but nothing if the event does occur before that date.
In liquid markets, the price of an event contract is generally regarded as reflecting the market’s assessment of an event’s probability at a given point in time. For example, a “Yes” contract that pays $1 if an event occurs and trades at 60 cents is commonly viewed as suggesting that the market believes there is a 60 percent chance that the event would occur.
Titus’ bill is an amendment to the original Commodity Exchange Act. The legislation, H.R. 2477, has been assigned to the House Committee on Agriculture, which routinely reviews matters relating to the commodity exchange.
“This is not just to protect the gaming industry,” Titus said last month when she first introduced the legislation. “This is to protect people who bet on these platforms and have no recourse if something goes wrong. There is no regulation to protect the consumer or programs for problem gambling. There’s no employment in the state to create jobs. They make no contribution whatsoever.”
Other critics have noted that prediction markets don’t monitor their customers, meaning there could be underage gambling occurring. Critics are also wary of possible insider trading that occurs within prediction markets, and that states collect no gaming tax revenue as they do with traditional sportsbook operations.
Other legislation
The increased popularity of prediction markets has resulted in additional legislation from other House and Senate members. Among them:
-The Prediction Markets Security and Integrity Act, proposed by Sen. Richard Blumenthal, D-Conn. The bill focuses on consumer protection, including setting age limits, restricting advertisements to minors and requiring enhanced “know your customer” rules.
-The Death Bets Act, proposed by Rep. Ted Lieu, D-Calif., and Sen. Adam Schiff, D-Calif., would ban contracts related to war, assassination or terrorism as well as any contracts closely related to death.
-The Public Integrity in Financial Prediction Markets Act of 2026, introduced by Rep. Ritchie Torres, D-N.Y., would prohibit federal officials, including members of Congress, the president and vice president, from trading event contracts on prediction markets.
-The Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, introduced this month by Sen. Chris Murphy, D-Conn., and Rep. Greg Casar, D-Texas, would prohibit wagers on “government actions, terrorism, war, assassination and events where an individual knows or controls the outcome.” It specifically targets trades that create incentives for officials to use insider information for profit, such as in geopolitical conflicts.
Arizona takes Kalshi to criminal court
Meanwhile, Nevada’s southern neighbor has entered the legal fight against prediction markets with a twist – Arizona was the first state to file a criminal complaint instead of a civil complaint against Kalshi.
Arizona Attorney General Kris Mayes filed criminal charges against Kalshi, accusing it of operating an illegal gambling business in the state and violating a state law barring wagering on elections.
“Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” Mayes said in a Tuesday release announcing the charges. “No company gets to decide for itself which laws to follow.”
The 20-count criminal case, filed in Maricopa County Superior Court, claims Kalshi broke Arizona law prohibiting the operation of an unlicensed wagering business and similarly broke the law by allowing bets on Arizona elections. All of the alleged crimes are misdemeanors, and all are being leveled against the company, not its executives.
Arizona joins Nevada, New Jersey, Massachusetts and Maryland in pursuit of legal action, while Illinois, Montana and Ohio have filed cease-and-desist notices.
Arizona is following a new trend by states to file lawsuits in state courts instead of federal courts where judges so far have been more sympathetic to gaming regulators in their decisions.
Nevada’s case is pending in Carson City District Court.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
