This story was originally published by Utah News Dispatch.

Katie McKellar
Utah News Dispatch

Utah Sen. John Curtis — along with California Sen. Adam Schiff — are leading a bipartisan charge to make clear that sports prediction markets are indeed gambling and therefore subject to regulation and, in some states like Utah, banned.

Curtis, a Republican, and Schiff, a Democrat, introduced the Prediction Markets Are Gambling Act on March 23. It would ban any entity registered with the Commodity Futures Trading Commission from “listing a contract that closely resembles a sports bet or a casino-style game,” according to a news release.

It would also reinforce Congress’ “original intent” that the Commodity Exchange Act “does not permit sports gambling,” the release said, and “removes any ambiguity” in the law that prediction markets have used to sidestep betting bans.

“Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators,” Curtis said in a prepared statement. “Our bipartisan legislation clarifies regulatory jurisdiction, ensuring that states can maintain their authority over sports betting and casino gaming.”

The Prediction Markets Are Gambling Act, Curtis said, “is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.”

Schiff, in a statement, said “sports prediction contracts are sports bets — just with a different name. And yet, these contracts are currently offered in all fifty states in clear violation of state and federal law.”

Schiff said the CFTC, rather than enforcing the law, is “greenlighting these markets and even promoting their growth.”

“It’s time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty, and offers no public revenue,” he said, adding that he’s “proud to partner” with Curtis to “put a stop to these illegal markets.”

The legislation comes as Commodity Futures Trading Commission Chair Mike Selig has come under fire. For years, the CFTC enforced its authority to ban contracts that resemble gaming. However, Curtis and Schiff’s release said the agency’s leadership has “abruptly reversed course — intervening in ongoing litigation and proceeding with rulemaking to significantly relax the CFTC’s enforcement of this clause.”

In Utah, Gov. Spencer Cox vowed to use “every resource within my disposal … to beat you in court” in response to Selig’s announcement last month that CFTC intends to “defend its exclusive jurisdiction over these derivative markets.”

“These prediction markets you are breathlessly defending are gambling — pure and simple,” Cox said at the time. “They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah.”

Curtis and Schiff’s bill has support from the Indian Gaming Association and the California Nations Gaming Association, according to statements issued March 23.

“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,” IGA Chair David Bean said.

Bean added that 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,” Bean said. “We look forward to working with leaders in Congress to hold these platforms accountable to protect consumers, sports integrity, and tribal and state sovereignty.”

California Nations Gaming Association Chair James Siva also applauded the legislation, saying 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,” Siva said. “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.”

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