A bill introduced in the Senate on Monday would ban prediction markets like Kalshi and Polymarket from accepting or listing transactions related to sports events and casino-style games.

The bill, co-sponsored by Sens. Adam Schiff, D-Calif., and John Curtis, R-Utah, is the first bipartisan legislation introduced in the Senate targeting the rise of sports betting on services like Polymarket and Kalshi. While traditional sports gambling is regulated by states, prediction markets use a different technical trading mechanism, via futures or commodity contracts, that falls under federal oversight.

“Sports prediction contracts are sports bets — just with a different name,” Schiff said in a statement announcing the bill’s introduction. “These contracts are currently offered in all fifty states in clear violation of state and federal law.”

“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,” Schiff said.

Created in 1974, the Commodity Futures Trading Commission has the exclusive right under the federal Commodity Exchange Act to regulate futures, options and swaps for registered commodities entities. Several prediction markets, like Kalshi and Polymarket, have registered with the CFTC as a type of derivative exchange called a designated contract market.

The bill introduced Monday would ban any entity registered with the CFTC from listing or making available any “agreement, contract, or transaction relating to any sporting event or athletic competition,” in addition to banning similar contracts for any casino-style game like poker or blackjack.

“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,” Curtis said in a statement. “The Prediction Markets Are Gambling Act is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.”

Hours after the bill was introduced, Kalshi announced it would launch new efforts to bar politicians from trading on their own campaigns and ban athletes from placing bets on their own sports. The company said the changes were aligned with recent congressional proposals and CFTC guidance and had been in development for months.

“Individuals involved in college and professional sports (including athletes, personnel, and referees) will be preemptively blocked from trading markets associated with sports they are involved in,” Kalshi said in a blogpost announcing the changes. The post said that while such trades have always been prohibited, the company previously investigated suspicious trades after the fact instead of blocking them in advance.

Prediction markets have soared in popularity over the past year in the United States, seeing over $1.2 billion in total trading during this year’s Super Bowl Sunday, with trading volumes for the entire week soaring past $4.5 billion.

The prediction market companies are hot commodities themselves. Last week, The Wall Street Journal reported, citing several unnamed sources, that Kalshi had secured a $22 billion valuation in its latest round of venture capital funding, while rival Polymarket is reportedly hoping to attain a similar valuation.

Both services have been jockeying for users’ attention and wallets, opening free grocery stores and trading-themed bars to lure in potential clients.

However, the services have also attracted mounting scrutiny over insider trading allegations in sports and other arenas. Leading AI company OpenAI fired an employee over allegations that the individual had placed bets on Polymarket tied to advance knowledge of the company’s product announcements, while bets on the death of Iranian Ayatollah Ali Khamenei highlighted the use of prediction markets in war and raised questions about national security risks.

Last week, prosecutors in Arizona filed criminal charges alleging Kalshi operated a gambling service without a license, unconvinced by arguments that prediction market deals are distinct from gambling.

“Kalshi may brand itself as a ‘prediction market,’” Arizona Attorney General Kristin Mayes said in a statement, “but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law.”

On Thursday, Major League Baseball announced a new partnership with Polymarket and the CFTC “to create clear boundaries with the goal of mitigating risk while providing fan engagement opportunities.”