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U.S. Sen. Ted Cruz of Texas plans to introduce legislation that would require state or tribal authorization for prediction markets to offer gambling-related event contracts, including sports contracts. According to an Oct. 20 report from Legal Sports Betting, Cruz intends to introduce the bill after the November midterms.
The proposal would give states authority over those contracts rather than allowing platforms to offer them solely under federal regulation. The report did not provide a bill name or number.
Gambling-related contracts would need state or tribal approval
The planned legislation would prevent federally regulated prediction markets from offering covered event contracts without authorization from state or tribal governments. The report describes the proposal as targeting all event contracts tied to gambling, including sports betting.
Under the proposal, prediction platforms would need gaming licenses in the states where they wish to operate, according to the report. It remains unclear whether every category of prediction market contract would require state regulation or how the legislation would interact with existing federal registration requirements.
Cruz, chairman of the Senate Committee on Commerce, Science, and Transportation, has argued that sports-event contracts circumvent state gambling laws. In May, he led a Senate hearing examining prediction markets’ legal status and their impact on sports integrity.
Proposal challenges federal oversight backed by Trump
Cruz’s approach conflicts with President Donald Trump’s support for federal oversight through the Commodity Futures Trading Commission.
“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump wrote on Truth Social, according to the report.
If enacted, the legislation could strengthen states’ court arguments against Kalshi and other operators offering sports-event contracts under federal regulation. That is a potential consequence of the proposal, not a court ruling or an enacted change in law. The reported next step is introduction after the November midterms.
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Source: As reported by LegalSportsBetting.com.
