Shoes Aren't Dropping, They're Raining Down
A prediction market-focused newsletter today (sorry) including the latest Congressional bill, new integrity guardrails, and what is going on in Nevada.
The Bulletin Board
THE LEDE: Another prediction market bill is filed in Congress, but this one is getting a lot of attention.
QUICK HITTER: Kalshi and Polymarket beef up integrity monitoring.
PREDICTION MARKET ROUNDUP: PM-focused news.
AROUND the WATERCOOLER: Kalshi has left Nevada, but is it abiding by the court order?
STRAY THOUGHTS: Utopia vs. dystopia.
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The Lede: New Congressional Ban Would Ban Sports at Prediction Markets
Another new bill in Congress takes aim at prediction markets, with the latest effort by Rep. Adam Schiff (D-CA) and Sen. John Curtis (R-UT) seeking to change the Commodity Exchange Act to expressly prohibit prediction markets from offering contracts that in any way resemble sports betting or casino games.
What’s interesting, is the level of attention this specific bill is receiving (as Forecast Tier subscribers know, this is one of six prediction market bills filed so far this year — plus a failed amendment to a larger bill).
Per the press release:
“For fifteen years, the CFTC has enforced its authority to prohibit the listing of a contract that involves, relates to, or references, ‘gaming.’ However, the CFTC and its Chair have abruptly reversed course—intervening in ongoing litigation and proceeding with rulemaking to significantly relax the CFTC’s enforcement of this clause. Now, the CFTC is entering into partnerships with entities like Major League Baseball to further facilitate these markets’ growth.”
Not surprisingly, the American Gaming Association (AGA), the Indian Gaming Association (IGA) & California Nations Indian Gaming Association (CNIGA), the newly created Gambling Is Not Investing (GINI), and Arnold Ventures, which is becoming increasingly involved in the debate, all applauded the effort:
AGA: “The introduction of the Prediction Markets Are Gambling Act is a critical step in reaffirming Congressional intent that all gaming, including sports betting, is not a federal commodity, and is governed by state and tribal law. The AGA strongly supports this bipartisan effort, led by Senators Schiff and Curtis, to uphold state and tribal sovereignty and protect consumers by ensuring sports and gambling-related contracts are prohibited.”
GINI (Mick Mulvaney, Executive Director): “Clearly something needs to be done. Prediction market platforms have unilaterally made sports gambling available on every phone in the country, regardless of local laws and in disregard for consumer protections and safeguards that legal sportsbooks implement. The CFTC is attempting to sow confusion about who regulates sports gambling in this country, but the law is clear: sports betting is a state issue. I’m glad to see Members of Congress stepping up to ensure that all forms of sports betting are governed by the same state-set regulatory framework. If it quacks like a duck, it’s probably sports betting and it ought to be regulated as such.”
IGA & CNIGA (Joint Statement): The Prediction Markets Are Gambling Act, introduced today by Senators Schiff and Curtis, provides much-needed clarity to the Commodity Exchange Act to prevent prediction market platforms from offering event contracts on sports events or casino-style gambling activities.
IGA Chairman David Bean (From the Joint Statement): “The bill will reaffirm existing tribal and state government authority to regulate sports betting, limit online gambling, or in some cases – continue to prohibit all forms of gambling. The bill will also quiet the chaos and federal overreach that the CFTC is fostering. Other than the growing number of court decisions siding with tribes and states, the prediction market platforms have seen no accountability and no oversight, as they disregard clearly established regulations while exposing consumers to unchecked gambling. We look forward to working with leaders in Congress to hold these platforms accountable to protect consumers, sports integrity, and tribal and state sovereignty.”
CNIGA Chairman James Siva (From the Joint Statement): “Prediction market platforms are taking advantage of a regulatory loophole to provide unregulated sports betting across the country. These sports event futures are illegal betting operations – full stop. By allowing anyone with a mobile phone to place wagers anywhere, these platforms undermine the authority of tribal governments and states, such as California, in regulating gaming within their borders. We strongly support this legislation, which will protect consumers and tribal communities from these harmful platforms.”
Arnold Ventures: “We applaud Senators Curtis and Schiff for their bipartisan leadership in introducing legislation that brings clarity to the rapidly expanding sports prediction market. The CFTC was created to regulate commodity derivative markets because businesses need price transparency and tools to manage volatility. Sports prediction is merely a form of gambling and, consistent with longstanding practice, should be regulated by the states.”
Kalshi… not so much, as it called the bill “motivated by casino interests,” even though one of the main sponsors is from anti-gambling Utah:
“Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists. It’s clear this bill is motivated by casino interests that are threatened by competition. They’re more worried about protecting their monopolies than protecting consumers.”
“Sports trading on regulated prediction markets offer a fairer choice to consumers, with no house that restricts winners and hooks people the more they lose. Tens of millions [of] consumers use regulated predictions markets for this very reason. We should let competition run its course instead of protecting monopolies.”
The Coalition for Prediction Markets also weighed in, with a similar statement (Kalshi is a member): “Millions of Americans trade sports on federally regulated prediction markets. Banning sports would just bolster unregulated platforms that lack uniform protections. The casino monopoly behind this bill does not care about consumer safety. They want to eliminate competition. Consumers should be able to decide for themselves.”
As I said on X, it might push sports bettors offshore, but there is also legal, regulated sports betting in 31 states and counting.
Quick Hitter: Kalshi and Polymarket Add Guardrails
Both Kalshi and Polymarket unveiled new and improved oversight of their markets yesterday, with the TL;DR version being Kalshi has added preemptive blocking of politicians who try to trade on their own races, and athletes who try to trade on the sport they are associated with through integrity monitor IC360. Polymarket announced a trio of changes to its international exchange around trades on stolen confidential information, illegal tips, and by anyone who can influence the outcome.
The Kalshi press release can be found here, and Polymarket’s new integrity monitoring can be found here.
On Kalshi, Todd Phillips, an assistant professor of law in the Robinson College of Business at Georgia State University, makes a great point (which also plays into the geolocation argument in the Around the Watercooler section):
And as Sportico’s Dan Bernstein (Straight to the Point Podcast guest #74) said of Polymarket’s missive:
And just to put a little bow tie on this story, AOC, who has been getting quite vocal on the topic, wasn’t buying it:
In fairly related news, Coinbase has been catching flak from users for pushing sports, which led to CEO Brian Armstrong tweeting in reply, “It’s a fair point, let us make sure this is tuned correctly. And we can probably provide some customization options on this - that section of the app is getting some new updates.”
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Prediction Market News Roundup
Utah Gov. wants to follow Arizona’s lead [KUER]: Utah Gov. Spencer Cox has been a vocal critic of prediction markets, which could lead to Utah joining Arizona and filing criminal charges, saying that Utah Attorney General Derek Brown is looking into that option. “I’ve been pretty, pretty blunt about how I feel about what these companies are doing, these gambling companies that are pretending to be something else,” he told reporters during his March governor’s news conference. “It’s, you know, walks like a duck and quacks like a duck. It’s a duck. And I think everybody agrees with that, except the people who are making billions off of trying to destroy our kids.”
Polymarket adds taker fees to fund makers rebate program [Polymarket, X]: Polymarket has rolled out two major updates. First, its expanded its referral program (previously in beta) with eligible users earning a share of the fees generated by anyone they refer. Second (and more controversially), starting March 30, 2026, taker fees expand from just Crypto and Sports to ten categories. The fees will be dynamic and lowest on lopsided odds, and will be used to directly fund the maker rebates.
Kalshi and Polymarket invest in new VC fund [Fortune.com]: “The CEOs of Kalshi and Polymarket are locked in a brutal fight to dominate the white-hot prediction market sector. But, in at least one instance, the two have put competition aside, and each has invested in an upcoming venture firm led by two early Kalshi employees. The fund, named 5c(c) Capital, is raising up to $35 million to invest in prediction market startups, according to a pitch document seen by Fortune.” According to Front Office Sports’ Ben Horney, “I'm told this fund will target all kinds of ancillary businesses, from market makers to companies working on AI infrastructure for platforms and prediction-market 'native media' (which could mean many things).”
Kalshi raises another billion at $22 billion valuation [Wall Street Journal]: “Investment firm Coatue Management is leading a new funding round for prediction-market operator Kalshi at a $22 billion valuation, according to people familiar with the situation. Kalshi is raising about $1 billion in the new financing, the people said. The deal will double the startup’s valuation in just a few months.” The valuation leapfrogs Kalshi over DraftKings and Flutter.
Polymarket’s mystery bar, no longer a mystery [WUSA 9]: A mysterious new bar concept tied to the prediction market platform Polymarket has been generating buzz in D.C., with most people asking the same questions: why and where? Clues pointed to the location being Proper 21 on K Street NW. “A manager at Proper 21 confirmed to WUSA9 that the bar will host the event Friday through the weekend.”
NCAA shines light on prediction markets [Legal Sports Report]: “NCAA President Charlie Baker used the opening of March Madness to escalate concerns about prediction markets, warning the platforms “have much more to do” regarding sports integrity and said the association could pursue additional action if federal regulators fall short. Speaking Wednesday on CBS Mornings, Baker said the NCAA is engaging with the Commodity Futures Trading Commission but made clear the organization is prepared to go further.” In response, the Kalshi News X account said, “Kalshi has never offered a single college player prop. The implication that we do is complete misinformation. The claim that we do not collect user information is equally false. Kalshi is a financial exchange; we have extensive integrity, surveillance, and oversight measures.”
NCAA sends another letter on prediction markets [Bill Speros, X]: In a follow-up to the NCAA’s January letter, NCAA President Charlie Baker is asking CFTC Chairman Michael Selig “to suspend collegiate sport prediction markets until a more robust system with appropriate safeguards is in place.” Among Baker’s asks are age restrictions (21); Geolocation of trades for integrity investigations; Mandatory cooperation in investigations; More robust Know-Your-Customer (KYC) requirements; Advertising and Name, Image, and Likeness (NIL) restrictions; and prohibitions on player prop markets.
Around the Watercooler
Social media conversations, rumors, and gossip.
Is Kalshi geofencing Nevada, or simply not letting customers with Nevada addresses trade? It appears to be the latter:
As attorney Daniel Wallach pointed out, allowing someone from California to cross over into Nevada and make trades would violate the TRO:
And for anyone arguing Kalshi didn’t have enough time to implement geolocation, recall the CFTC told it to prepare for this very situation back in October 2025:
“The Divisions are issuing this Advisory to caution FCMs, IBs, DCMs, and DCOs that State regulatory actions and pending and potential litigation, including enforcement actions, should be accounted for with appropriate contingency planning, disclosures, and risk management policies and procedures.”
Stray Thoughts
As in the statements in today’s Lede, I find it interesting that prediction markets and their cheerleaders contrast sportsbooks and prediction markets in a good vs. evil kind of way. That prediction markets are the idyllic version of the ‘greedy’ sports betting industry.
FWIW, I 100% believe Sporttrade CEO Alex Kane wants this utopia to come to pass. Further all of these things could be true… in a perfect world where prediction markets weren’t for-profit entities that are not only facilitating the transactions, but also have the dual role of taking (or wanting to take1) the “sharp” side of the action.
Unfortunately, we live in reality, where prediction market founders like to brag about being young billionaires.
Or consider for a moment, that in the span of a few months Kalshi went from election markets to sports betting to parlays combos, despite arguing in court that election markets should be allowed because it’s not like they’re sports events, which are clearly off limits. Yet, we are supposed to believe these are altruistic companies with the bettors’ best interest at heart. That they won’t, at the first opportunity, blur the line between the exchange and the trading arm of their respective businesses, or start offering casino contracts, or add more fees if regulations or financial burdens tighten?
As Quentin Tarantino says at the beginning of Reservoir Dogs, “Whoa, whoa, whoa, whoa, whoa… Time out Green Bay. Tell that fucking bullshit to the tourists.”
“And in the next few months, we plan to launch a dedicated market making division, because bringing our own liquidity to market is how we will deliver tighter pricing and a more consistent customer experience.” - Jeanine Hightower-Sellitto, general manager of Predictions, said during DraftKings’ Investor Day and presentation.