U.S. lawmakers have introduced a series of bills this month targeting prediction markets, but none are likely to pass this year, according to investment bank TD Cowen, which instead flagged the 2028 election as the bigger risk for the sector.

"Washington risk is rising for prediction markets with Congress considering bills related to sporting events, government action, terrorism and war," Jaret Seiberg, managing director at TD Cowen's Washington Research Group, said in a Monday note. "We view these primarily as messaging bills and do not see a path for them to become law in this Congress. The real threat, in our view, is the 2028 presidential election given bipartisan concerns about event contracts overriding state gaming laws."

Three bills targeting prediction markets have been introduced this month, proposing a wide range of restrictions. On Monday, a bipartisan pair of U.S. Senators — John Curtis (R., Utah) and Adam Schiff (D., Calif.) — introduced legislation to prohibit entities regulated by the Commodity Futures Trading Commission, including prediction market exchanges Kalshi and Polymarket's U.S. platform, from listing contracts related to sporting events. The bill also seeks to prohibit "casino-style games" from being listed on the platforms.

Another bill from Senator Chris Murphy and Representatives Gabe Amo, Greg Caesar, and Yassamin Anasari — all Democrats — introduced legislation on March 18 that would bar wagering on government actions, terrorism, war, assassination, and events where the one entering the contract knows the outcome in advance.

Separately, Democratic Senators Richard Blumenthal and Andy Kim introduced legislation on March 11 to regulate prediction markets more broadly, including allowing states to oversee such contracts and imposing rules such as insider trading bans and minimum advertising standards.

Despite the flurry of activity, Seiberg said there is no viable path for these bills to become law in this Congress.

Even if legislation were to advance, Seiberg expects President Donald Trump to veto it, given his administration’s support for prediction markets. He also said he does not see a path for Congress to secure the two-thirds majority needed to override a veto.

At the same time, legal battles are already unfolding. Several U.S. states — including Nevada, Utah, Arizona, Iowa, Ohio, New York, New Jersey, and Maryland — are engaged in disputes with prediction market platforms over whether such contracts are allowed under existing laws, highlighting growing tensions between state regulators and the industry.

While near-term legislative risk appears limited, Seiberg said the longer-term outlook is more uncertain.

"We believe the real problem is that prediction markets appear to making the calculus that if they can get well established over the next three years that the outcome of the 2028 presidential election will not matter because prediction markets will be too advanced to dismantle," Seiberg wrote. "That strategy may not work as many Democrats in Congress appear worried about the nationwide rollout of prediction markets while some Republicans see this as a fight over the right of states to regulate sports gambling."

"It is why policy risk is high for prediction markets even if legislation this year will not advance," Seiberg concluded.