- The report said lawmakers believe sports betting on prediction markets like Kalshi and Polymarket resembles gambling and bypasses state-level consumer protection.
- Crypto exchanges, including Coinbase, Gemini, and Kraken, have recently launched or announced plans to enter prediction markets.
- Robinhood has already rolled out sports-related contracts through its partnership with Kalshi.
A bipartisan pair of U.S. senators has reportedly introduced legislation targeting prediction markets, just as crypto exchanges including Coinbase (COIN), Gemini (GEMI), Kraken, and others are expanding into the fast-growing sector.
According to a report by The Wall Street Journal, the bill introduced on Monday would prohibit Commodity Futures Trading Commission (CFTC)-regulated entities like Kalshi and Polymarket from listing contracts tied to sporting events. It said that the proposal marks the first bipartisan Senate effort to directly address prediction markets.
Senate Targets Sports Contracts On Prediction Platforms
The report said lawmakers backing the bill argue that sports-related contracts on federally regulated platforms resemble traditional betting products while operating outside state-level gambling frameworks.
“The CFTC is greenlighting these markets and even promoting their growth,” Sen. Adam Schiff (D-CA) stated. “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.”
The bill also extended beyond sports, seeking to prohibit “casino-style games” such as slot machines, blackjack, video poker, and bingo from being offered through these platforms, the report said.
Sen. John Curtis (R-UT), who co-sponsored the bill, framed the issue around consumer exposure. “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,” he said.
Crypto Exchanges Accelerate Push Into Prediction Markets
Both Coinbase (COIN) and Robinhood (HOOD) have prediction markets and allow for sports betting on their platforms via partnerships with Kalshi. Coinbase CEO Brian Armstrong has been pushing for Coinbase to become an “everything exchange” and recently announced USDC-funded trade on prediction markets in partnership with Kalshi. Meanwhile, Robinhood (HOOD) partnered with Kalshi to launch its prediction markets hub in March 2025 and introduced sports contracts in August 2025.
The new legislation could put a dent in their plans to expand revenue streams beyond cryptocurrency trading, and stock trading, in Robinhood’s case. Coinbase and Robinhood are the only two listed companies operating prediction markets in partnership with Kalshi, but others have also expanded into the space.
Gemini (GEMI), backed by the Winklevoss twins, introduced ‘Gemini Predictions’ in December 2025 for betting on sports events. Kraken, widely anticipated to go public this year, said it would launch prediction markets on its platform in 2026.
COIN’s stock was down 2.75% in pre-market trade amid broader weakness across the stock and cryptocurrency markets after fresh threats from President Donald Trump against Iran kept oil prices above the $100 mark. Meanwhile, GEMI’s stock fell 3.35%, and HOOD’s stock was down 2.14% in early morning trade on Monday.
On Stocktwits, retail sentiment around COIN and HOOD remained in ‘bearish’ territory over the past day, while sentiment around GEMI improved to ‘neutral’ from the ‘bearish’ zone.
Read also: Coinbase Launches Perpetual Futures Amid Hyperliquid’s Trading Boom – MAG 7, SPY, QQQ In Lineup
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