Ted Cruz Plans a Bill to Put Sports Prediction Contracts Under State and Tribal Control

The Senate Commerce Committee chairman intends to file legislation after the 3 November midterms that would bar gambling-linked event contracts, sports included, unless a state or tribe authorises them, Bloomberg Law reports. No text, bill number or co-sponsor is public yet, and the window before this Congress ends is short.

• Senator Ted Cruz of Texas plans to introduce a bill after the 3 November midterms that would stop prediction markets offering event contracts tied to gambling, including sports, unless a state or tribal government authorises them, according to details obtained by Bloomberg Law
• Nothing has been filed yet, so the bill's text, definitions, effective date, co-sponsors and committee are all undisclosed
• Unlike the Prediction Markets Are Gambling Act, which would ban sports contracts on registered exchanges outright, the reported Cruz approach leaves the decision to each state or tribe
• It cuts against the White House and a CFTC whose carve-out for licensed sportsbooks took effect on 19 October alongside a proposal to define event contracts as swaps
• No public response to the plan from Kalshi, Polymarket, the American Gaming Association, tribal gaming groups or the CFTC has been found, and any bill not passed by early January 2027 lapses

The Commerce Chairman Wants States to Decide Who Offers Sports Contracts

Cruz, who chairs the Senate Committee on Commerce, Science and Transportation, plans to introduce legislation after the midterms "aimed at prohibiting federally regulated prediction markets from skirting state gambling laws", Bloomberg Law reported last week. According to details of the bill obtained by the outlet, it would prevent prediction markets from providing event contracts tied to gambling activities, including sports betting, unless authorised by a state or a tribal government. The open portion of the report does not say which statute the bill would amend.

The bill has not been filed. Cruz's sponsored legislation on Congress.gov showed no prediction market measure on 22 October, and his Senate press page carries no release on it. Its definitions, effective date, co-sponsors and committee referral are therefore not known, and CDC Gaming notes that the report did not establish whether every category of contract would be covered.

Bloomberg Law reports that lawmakers from both parties are poised to step up efforts against platforms such as Kalshi as the Trump administration asserts federal control. President Donald Trump wrote on 26 May that it is "critically important that the CFTC's exclusive authority over Prediction Markets is maintained", according to Cointelegraph.

Cruz Has Called Sports Contracts Sports Bets Before

The plan follows a Senate Commerce subcommittee hearing on sports integrity on 20 May, led by Senator Marsha Blackburn. Cruz put two questions to that panel, according to NPR: how to preserve the integrity of sports "in a world where sports betting exists", and whether prediction markets "are operating within the law, or are they defying the law and improperly infringing on state sovereignty". SiGMA reports that he called sports event contracts sports bets and said Congress or the Supreme Court might have to settle the question.

Three prediction market bills are already in this Congress, none past the committee stage. The closest to Cruz is S. 4160, the Prediction Markets Are Gambling Act, filed on 23 March by Democrat Adam Schiff with Republican John Curtis and Democrat Catherine Cortez Masto. Its text amends the Commodity Exchange Act so that no contract relating to a sporting event or casino-style game "may be listed or made available for clearing or trading" on a CFTC-registered entity, and states that nothing in it preempts state law. It went to the Senate Agriculture, Nutrition and Forestry Committee. When it was announced, Indian Gaming Association chairman David Bean said it would "reaffirm existing tribal and state government authority to regulate sports betting", while a Kalshi spokesperson said it was "motivated by casino interests that are threatened by competition", according to Decrypt.

The plan lands amid a run of state litigation. Utah has sued Kalshi and the market maker Susquehanna in state court, Crypto.com and Novig have sued Missouri, and Polymarket has sued Ohio. New Jersey's petition asking the Supreme Court to decide who regulates Kalshi has the support of 39 states and the District of Columbia, though not Texas, and Kalshi's response is due on 9 November.

A Permission Model Would Hurt the Exchanges Most Where They Have Grown Fastest

On the reported outline, Kalshi and Polymarket would keep their federal registrations but could list sports contracts only where a state or tribe said yes. The American Gaming Association told Texas senators that sports contracts and parlays make up 85% of Kalshi's trading, and Eilers & Krejcik Gaming estimates that the 19 states without legal online sports betting account for 69% of its volume, Texas and California alone 43%, SiGMA reports. Those states are the least likely to authorise anything soon: Texas bans sports betting, and its next regular session opens on 12 January. Even where sports betting is licensed, the terms may not suit an exchange; Polymarket is arguing in court that Ohio's in-state requirements discriminate against out-of-state businesses. A permission model is gentler than the Schiff ban on paper, but across much of the country it could work out much the same.

Sportsbook-Backed Exchanges Lose the Map They Were Built For

Operators with state sportsbook licences are better placed to seek authorisation, but their prediction products were built for places the sportsbook cannot reach. Fanatics, for instance, says its combined app reaches California, Texas and Florida, where it has no sportsbook and customers get the prediction markets product. Under an authorisation rule, that reach would depend on those states changing their law, leaving the operators with the markets where they already pay state tax and meet state compliance rules. That would answer the casino lobby's complaint, but it would also close the hedge that sportsbook groups such as Fanatics have built.

A Lame-Duck Bill Against the White House Faces Long Odds

A bill introduced after the midterms has weeks, not months, to move before the 119th Congress ends in early January 2027, after which it would have to be reintroduced. The three prediction market bills already filed went to the Agriculture committees, which oversee the CFTC and which Cruz does not chair, and none has moved. The administration backs exclusive CFTC authority, and the agency's own rulemaking, open for comment until 18 November, runs the other way. The plan's weight may lie elsewhere: a Republican committee chairman from Texas, which bans sports betting, endorsing state control gives the states a political argument to set beside their legal one as the Supreme Court decides whether to hear the issue.

What has been reported is a direction, not a text, and until a bill is filed its definitions and reach are guesswork. It does show that the case for state control of sports contracts now has a senior Republican voice in the Senate as well as in the courts.