Breaking News! Rare Bipartisan Alliance on Capitol Hill to Completely Kill "Legal Sports Betting," Kalshi Gets Court Order, Are Prediction Markets in Trouble?

Brothers, today’s news gave me chills down my spine. Do you know what we’re most afraid of? It’s not the iron fist of regulation, but the sudden unity of the usually quarrelsome Congress folks, standing hand in hand.

Just a couple of days ago, California Democratic Senator Adam Schiff surprisingly teamed up with Utah Republican Senator John Curtis to draft a bill. I can’t even bother to remember the name; the core is simple: from now on, any platform regulated by the U.S. Commodity Futures Trading Commission (CFTC)—whether sports betting contracts, casino slot machines, or poker contracts—must be shut down and banned!

This is directly targeting Kalshi and Polymarket’s U.S. operations, hitting hard.

And this isn’t just empty talk; the knife is already at their necks. A federal appeals court in Nevada quickly issued a temporary restraining order against Kalshi, at least for 14 days, preventing them from offering sports contracts in Nevada. Lawyers say this can’t be appealed, meaning Kalshi is effectively forced out during this period. Even more severe, Arizona directly filed criminal charges against Kalshi’s parent company, accusing them of unlicensed gambling operations—20 charges right off the bat, aiming to crush them completely.

Over the past three months, four federal bills targeting prediction markets have been proposed; Massachusetts courts ruled Kalshi’s sports contracts violate state law; Tennessee and Michigan are also not idle. This is no longer a solo fight—it’s a coordinated crackdown involving federal and state governments, courts, and legislative bodies.

Why are sports contracts so hated?

Honestly, it’s because they infringe on others’ turf and look too much like gambling. Schiff said the CFTC is giving a green light, engaging in regulatory arbitrage, infringing on consumer protections in various states, and even threatening tribal gambling—an important part of legal gambling in many states. No wonder they’re furious. Curtis played the emotional card, saying many young people in Utah are addicted to this stuff, and it should be regulated by states, not the federal government.

The most ironic part is yet to come.

Do you know Major League Baseball (MLB)? They’re currently embroiled in the biggest betting scandal in decades, with their reputation tarnished. Yet, they signed an authorization agreement with Polymarket, making it an official prediction market platform, even using their data and logo. The league’s idea seems to be that it’s better to regulate than to ignore, keeping an eye on things rather than running wild in the gray area.

This move is completely opposite to the lawmakers’ desire for a blanket ban.

But are the lawmakers’ concerns justified? Maybe not. There’s already a precedent on Polymarket—just hours before the U.S. military launched an attack on Iran, large anonymous bets were placed, earning hundreds of thousands of dollars. For ordinary retail investors, the information is already priced in, so it’s just for fun; but for insiders with confidential info, a liquid platform is basically a cash machine. Sports betting? The manipulation potential is enormous.

Now, it all hinges on a few key points: Will the Nevada 14-day hearing turn into a permanent ban? How will the criminal case in Arizona be decided? And how far can the bipartisan bill go in the Republican-controlled Senate—especially since some Republican lawmakers are somewhat ambivalent, as they’ve also profited from prediction markets, including Trump himself.

In short, the prediction market waters are getting muddier. Especially those pure betting contracts—betting on outcomes or size—are hard to justify under the guise of “hedging risk,” and they might be the first to be sacrificed.

This regulatory storm may seem distant from our crypto trading, but it’s terrifying upon closer look. Today they ban “betting on gambling,” tomorrow they might find reasons to crack down on other “event contracts.” The fantasy of decentralization is fragile—crumbling like paper in the face of real politics and vested interests.

Are you ready for stricter regulations on your positions?

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