Key points
- Sen. Ted Cruz plans a bill that would require state or tribal approval before prediction markets offer gambling-linked event contracts, including sports betting.
- Bloomberg Law reported the plan on 16 October; Cruz intends to file after the 3 November midterm elections.
- The bill has not been introduced and its text has not been published.
- Federal appeals courts have split on Kalshi’s sports contracts, and a Supreme Court petition from New Jersey is pending.
The Cruz prediction markets bill would bar platforms from offering gambling-linked event contracts, including sports betting, unless a state or tribal government authorises them, Bloomberg Law reported on 16 October. US Senator Ted Cruz, a Texas Republican, intends to file it after the midterm elections on 3 November.
What the Cruz bill would do
Cruz chairs the Senate Committee on Commerce, Science and Transportation. According to details Bloomberg Law obtained, the bill is aimed at stopping federally regulated prediction markets from sidestepping state gambling laws. Platforms such as Kalshi, which run markets on sports and other events, would need a state or tribal sign-off for any contract tied to gambling.
The approach differs from a separate bipartisan House bill from Nevada Reps. Mark Amodei and Steven Horsford, which would ban sports prediction market contracts, according to Horsford’s office. Under Cruz’s plan, a contract could be offered wherever a state or tribal government approves it.
Bloomberg Law reported that lawmakers from both parties are preparing to step up efforts against platforms like Kalshi, and that the Trump administration is asserting federal control over the industry. The 119th Congress ends in early January 2027, which leaves a short window to pass a bill filed after the midterms. Texas, Cruz’s home state, has no legal sports betting.
Prediction markets in the courts
The bill arrives while courts disagree over who regulates sports event contracts. A divided Third Circuit panel sided with Kalshi in its dispute with New Jersey in April. The Ninth Circuit in August and the Sixth Circuit in September reached the opposite conclusion in cases involving state gambling laws.
New Jersey has asked the US Supreme Court to hear the case, and 39 states and the District of Columbia have urged the justices to take it. On 20 October, Utah’s attorney general sued Kalshi in state court, alleging its event contracts are illegal gambling. Earlier cases are covered in EpicWins Kalshi coverage.
The Commodity Futures Trading Commission (CFTC) has proposed classifying event contracts as swaps. It has also issued an interim rule that places sportsbook wagers and casino games outside the swaps definition. More on the agency is in EpicWins CFTC coverage and the prediction markets regulation section.
Next steps
Kalshi’s response to New Jersey’s Supreme Court petition is due on 9 November, and comments on both CFTC measures are due on 18 November. Cruz plans to file the bill after the 3 November midterms.
