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Sen. Ted Cruz plans to introduce legislation after the November midterm elections that would bar federally regulated prediction markets from offering gambling-related event contracts, including sports contracts, without state or tribal authorization. The bill has not been introduced, and its text has not been released, according to RG.org’s report.
Proposed authorization requirement remains undefined
RG.org, citing Bloomberg Law’s Oct. 16 reporting, says the proposal would allow state jurisdiction over prediction markets. Kalshi was among the platforms named in the reporting.
The available information does not establish the proposal’s precise scope, how a state or tribal government would grant approval, or whether any lawmakers have agreed to co-sponsor it. No bill number or effective date is available.
Cruz chairs the Senate Commerce, Science and Transportation Committee. At a May hearing on sports integrity, he questioned whether prediction markets were operating lawfully or infringing on state sovereignty.
The reporting identifies no Massachusetts-specific provision or change affecting Massachusetts operators or players.
Courts and regulators are weighing competing claims
Prediction market operators argue that sports event contracts are financial products subject to exclusive Commodity Futures Trading Commission oversight. States and tribes contend that the products are sports wagers that should comply with gambling rules.
According to RG.org, the Third Circuit sided with Kalshi in April, while the Ninth and Sixth Circuits reached opposite conclusions in August and September, respectively.
New Jersey has asked the U.S. Supreme Court to hear Flaherty v. KalshiEX. Thirty-nine states and the District of Columbia have urged the court to take the case; the reporting does not identify Massachusetts as a participant.
Separately, the CFTC proposed classifying event contracts as swaps and issued an interim rule placing sportsbook wagers and casino games outside that definition. Comments on those measures are due Nov. 18.
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Source: As reported by RG.
