Sen. John Curtis says prediction markets undermine Utah’s anti-gambling laws

The rise in prediction markets raises concerns for states that have bans on gambling by providing loopholes to evade local laws, according to Utah Sen. John Curtis.

In a Senate committee hearing this week, Curtis pressed federal officials on the structure of prediction markets and its striking resemblance to betting markets — arguing that without guardrails, it allows users to skirt state laws that prohibit gambling. Utah is one of just two states that bans gambling in all forms, but Curtis says those bans have been challenged due to prediction markets.

“If I were hearing that back in Utah, I would say, ‘I think something might happen. I’m going to put money down on it, and I have the chance of either making more money or losing money on that.’ Is that accurate?” Curtis asked.

Utah Sen. Curtis wants to crack down on sports betting loopholes on prediction markets

“Yes,” said former Rep. Patrick McHenry, who was testifying on the panel. “And it’s an uncertain outcome, just like whether or not you’re going to have a crop that comes in this fall or not, based off of weather, unpredictable events along the way.”

“So, if I’m talking to these folks back home in the town hall meeting, they’re going to say to me, ‘Tell me how that is not gambling,’ right?” Curtis replied. “It seems to meet every definition of gambling.”

Prediction markets under scrutiny

The exchange comes as prediction markets receive renewed scrutiny among lawmakers, particularly amid allegations of insider trading on sites such as Polymarket and Kalshi. Those allegations emerged after a Polymarket trader won $400,000 in January after predicting then-Venezuelan President Nicolás Maduro would soon be removed from office.

Hours later, President Donald Trump announced the successful mission to capture Maduro.

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Curtis has previously sought to crack down on prediction markets after introducing a bill alongside California Sen. Adam Schiff in March that would prohibit prediction markets registered under the Commodity Futures Trading Commission from listing any sports-related prediction contracts or casino-style games.

Those loopholes, Curtis argues, have allowed companies to evade state gambling laws, including in Utah, where the practice is illegal. Although it’s illegal in Utah, some markets such as Kalshi have established loopholes by allowing traders to buy and sell contracts tied to specific outcomes. That way, the practice is framed as an investment but serves the same purpose as gambling — without needing to use platforms such as FanDuel, which are banned.

Other lawmakers have expressed concerns with prediction markets, with the Senate unanimously approving a policy banning senators and staffers from using prediction markets. The House is considering implementing a similar policy.