The Senate Bill That Would Make Prediction Markets Legally Gambling, Explained

On March 23, 2026, Senators Adam Schiff (D-CA), John Curtis (R-UT), and Catherine Cortez Masto (D-NV) introduced S. 4160, officially titled the Prediction Markets Are Gambling Act. The bill was read twice and referred to the Senate Committee on Agriculture, Nutrition, and Forestry. It is a direct legislative response to the ongoing regulatory dispute over whether platforms like Kalshi, Coinbase, and FanDuel Predicts are operating legal financial exchanges or illegal gambling operations. The answer, according to these three senators, is the latter.

The bill proposes to amend the Commodity Exchange Act to explicitly prohibit prediction contracts involving sporting events and casino-style games from being listed or traded on CFTC-registered exchanges. That is a targeted but consequential change. For the past year, the core of the prediction market debate has been whether the Commodity Futures Trading Commission has authority over these products or whether state gambling regulators do. S. 4160 would settle that argument by removing sports-event contracts from the CFTC’s jurisdiction entirely.

What the Bill Actually Prohibits

The bill defines two categories of contracts that would be banned from CFTC-regulated platforms. The first is any contract tied to a sporting event or athletic competition, which is defined broadly enough to cover professional, collegiate, and amateur sports at any level, including virtual competitions. The second is any contract tied to what the bill calls a casino-style game — slot machines, blackjack, roulette, poker, bingo, lotteries, and simulations of any of those games.

Critically, the bill explicitly states that it does not preempt state laws. This means states that have already legalized sports betting under their own regulatory frameworks are unaffected. The prohibition applies to federally regulated exchanges under the Commodity Exchange Act, not to state-licensed sportsbooks. That distinction matters for understanding who wins and loses if this bill passes.

What Happens to Kalshi — and to Platforms Like It

Kalshi is the highest-profile CFTC-registered prediction market platform currently operating in the United States. It has been at the center of a legal battle over whether its sports-event contracts constitute gaming under the Commodity Exchange Act. The company’s position is that it is a federally regulated financial exchange, not a gambling operation. S. 4160 would resolve that dispute by legislative fiat — simply making it unlawful for any CFTC-registered entity to offer these contracts, regardless of how the ongoing court proceedings ultimately land.

FanDuel Predicts and similar products from mainstream sportsbook operators would also be affected, since those products are currently structured as CFTC-regulated prediction markets rather than state-licensed sports wagers. The reason operators built them that way was precisely to reach users in states without legal sports betting — because CFTC-registered products are not subject to state gaming laws. S. 4160 would close that loophole.

The CFTC’s Role and the Political Backdrop

The timing of this bill tracks directly with actions by CFTC Chairman Michael Selig. In November 2025, Selig testified before the Senate Agriculture Committee that he would not pre-judge whether sports event contracts constituted gaming. But by early February 2026, the CFTC had withdrawn a proposed rulemaking that classified sporting events as gaming and pulled prior guidance cautioning exchanges against sports-based contracts. Selig also posted publicly that he “strongly disagrees” that prediction markets violate the law — a reversal of his earlier testimony.

That shift prompted a letter in February 2026, signed by Schiff, Cortez Masto, and more than 20 other Democratic senators, urging Selig to reverse course. S. 4160 takes the next step: instead of asking the CFTC chairman to change his position, it changes the underlying law so the chairman’s position does not matter.

What This Means If You Bet in a State Without Legal Sports Betting

This is where the bill has the most direct impact for bettors. If you are in a state that has not yet legalized sports betting — check the full sports betting landscape by state — prediction market platforms have been one of the few legal ways to wager on game outcomes. FanDuel Predicts, for example, specifically made its sports-event contracts available only in states without licensed sports betting, because those states had no rules prohibiting it. If S. 4160 passes, that option goes away.

For bettors in states like Nevada, which has a long-established licensed sports betting market, this bill changes very little in practice. Nevada bettors are already using state-regulated sportsbooks. The impact falls hardest on bettors in the remaining holdout states who have come to rely on prediction markets as their only legal outlet.

The bill is currently in committee and has no scheduled hearing date. With a bipartisan group of sponsors — a Democrat from California, a Republican from Utah, and a Democrat from Nevada — it has at least some cross-aisle support, but significant opposition from the prediction market industry and their allies in Congress should be expected. Whether it moves forward will depend largely on how the courts handle the ongoing litigation around Kalshi and whether public pressure for regulatory clarity continues to build.