- A planned bill from U.S. Senator Ted Cruz would grant states jurisdiction over prediction markets.
- Cruz’s bill, which he intends on introducing after the Nov. midterms, would prevent prediction markets from offering event contracts unless authorized by state or tribal governments.
- Should the bill become law, it will help the states’ arguments in court against Kalshi and other prediction market operators that offer sports-event contracts under federal regulation.
DALLAS – A planned bill from U.S. Senator Ted Cruz would require prediction markets to be authorized by state or tribal government. Cruz’s legislation would prevent federally-regulated prediction markets like Kalshi from avoiding state gambling laws to offer their sports-event contracts.
Cruz, a U.S. Senator from Texas and Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, has voiced his opposition towards prediction markets and believes they circumvent state gambling laws with their sports-event contracts. Most notably in May, Cruz led a U.S. Senate hearing to raise questions about prediction markets operating within the law and how they impact the integrity of sports.
According to a report from Bloomberg Law, Cruz expects to introduce his bill after the November midterms. The legislation would target all event contracts tied to gambling, which includes sports betting, but the report didn’t specify if every type of prediction market contract will require state regulation.
Cruz Opposing President Trump’s Federal Regulation Stance
It’s important to note that Cruz’s bill isn’t limited to Texas and instead concerns the federal regulation of prediction markets. That puts the bill in direct opposition to President Donald Trump, who supports the federal oversight of prediction markets with the Commodity Futures Trading Commission (CFTC).
In May, that stance was reaffirmed with Trump’s announcement on Truth Social that “It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive.”
As the law currently stands, prediction markets only need to acquire federal registration. Under Cruz’s bill, prediction platforms would need gaming licenses across all states they wish to operate in.
