Sen. Ted Cruz plans legislation requiring state or tribal authorization before prediction markets can offer gambling-related event contracts, including sports bets. Pat Evans reports for SBC Americas, citing Bloomberg Law, that Cruz intends to introduce the bill after the November 3 midterm elections. It would give governments that restrict sports betting a clearer say over access through federally registered exchanges.
Event contracts are bets on whether something happens, sold as financial products. Kalshi and other exchanges claim federal oversight by the Commodity Futures Trading Commission displaces state gambling law. The reported proposal would make local permission a condition of offering gambling-related contracts. That matters in Texas, where sports betting remains prohibited but residents have been an important audience for prediction markets.
Evans cites an Eilers & Krejcik Gaming estimate that Texas and California accounted for 43% of Kalshi’s trading volume. The same estimate attributed 69% to the 19 states without legal online sports betting. These are industry estimates, but they show the commercial stakes: access to places that have withheld permission for online sportsbooks is a substantial part of the business.
State and tribal authority also determines who can enforce the conditions surrounding a wager. The cost to customers remains money lost on bets, whatever label the platform uses. This proposal addresses who gets to permit the activity; the reporting supplies no evidence that it would fund treatment or reduce household losses. Licensed sportsbooks also have a commercial interest in limiting competitors operating under different rules.
Federal appeals courts have reached conflicting conclusions about state authority over Kalshi’s sports contracts, and New Jersey has sought Supreme Court review. Cruz’s proposal would put that boundary before Congress. At publication, the bill had yet to appear on Congress’s website. Its final language, prospects and effects on consumer safeguards remain unsettled.