For a bill named the Facial Recognition to Protect Children Act, the word “facial” appears exactly once in its 27 pages. That observation came from gaming attorney Daniel Wallach, and it has turned the Kalshi child protection bill from a bipartisan feel-good story into the sharpest fight in the prediction market industry this summer. The other 26 pages amend the Commodity Exchange Act.
KEY FACTS AT A GLANCE
- Bill: Facial Recognition to Protect Children Act, introduced July 15, 2026
- Sponsor: Rep. Josh Gottheimer (D-NJ), with eight bipartisan cosponsors
- Requirement: Facial age estimation at login or before a wager or event-contract trade
- Scope: Licensed online sportsbooks and prediction markets, including Kalshi and Polymarket
- Age threshold: 18, not 21
- Endorsed by: Kalshi, whose chief executive appeared at the launch
- The objection: Amendments to the Commodity Exchange Act that critics say ease CFTC approval of sports and casino contracts
What the bill says it does
Gottheimer introduced the measure on July 15 with eight cosponsors: Republicans Jeff Van Drew of New Jersey, Nick LaLota of New York and Bruce Westerman of Arkansas, and Democrats Kristen McDonald Rivet of Michigan, Jimmy Panetta of California, Darren Soto of Florida, Tom Suozzi of New York and Ritchie Torres of New York. Torres has been active on this file before, having previously introduced a bill to ban insider trading on prediction markets.
The mechanism is age estimation rather than identity verification. Platforms would read facial structure and patterns to estimate whether a user is over 18, either at login or immediately before a wager or event-contract trade. The bill bars operators from storing identity or biometric data, which heads off the most obvious privacy objection. We covered the requirements in detail in our explainer on the bill when it was introduced.
The underlying problem is real and well documented. Common Sense Media’s January report, Betting on Boys, found that 36% of boys aged 11 to 17 had gambled in the past year, rising to nearly half of 17-year-olds. Biometric Update noted the bill leaves the technical questions open: no accuracy standards, no rule for borderline estimates, no anti-spoofing requirement against photographs or recorded video.
“Boys are gambling from a very early age. Through the games they play, the social media platforms they use every day, and their friends, gambling has become a fact of many boys’ day-to-day lives—and often in ways parents may not recognize.”
— James P. Steyer, Founder and CEO, Common Sense Media
What the other 26 pages do
Wallach’s reading, reported by CasinoBeats on July 24, is that the facial recognition provision is the smallest part of the document. The substantive weight sits in amendments to the Commodity Exchange Act, the statute that governs what the CFTC may and may not let an exchange list.
“For a bill that’s titled ‘Facial Recognition to Protect Children Act,’ seems odd that the word ‘facial’ appears only one time in the body of the 27-page bill.”
— Daniel Wallach, gaming attorney
His first objection concerns the public interest test. That test is the CFTC’s discretionary ground for refusing to let a contract list at all. Wallach says the bill would provide “an easy backdoor for the CFTC to approve both sports-event contracts AND casino gambling event contracts by equating ‘contrary to the public interest’ with ‘materially encouraging violence or similar unlawful activity.'” Tie the standard to violence and unlawful activity and a market on who wins the Super Bowl clears it without difficulty.
His second objection turns on two words. Where the Commodity Exchange Act currently refers to event contracts “involving” gaming, the bill would say “based on.” In Wallach’s reading that narrows the provision so it captures only contracts whose underlying event is itself gaming, a World Series of Poker market being the example he gives, while contracts written on sporting events fall outside it. Kalshi did not respond to CasinoBeats when asked about the allegations.
A NOTE ON THE BILL TEXT
No bill number has surfaced publicly and the full text had not been posted to congress.gov as of July 17. Every characterisation of the specific statutory language above, including the page count and the wording of the amendments, rests on Wallach’s reading of a copy of the bill as reported by CasinoBeats. It has not been independently verified against a public text.
TWO READINGS OF THE SAME BILL
The sponsors’ case
- Closes an honour-system gap on age checks
- Covers sportsbooks and prediction markets alike
- Bans storage of biometric and identity data
- Responds to documented teen gambling growth
- Bipartisan, with nine members behind it
The critics’ case
- One mention of facial recognition across 27 pages
- Narrows the CFTC public interest test
- Rewrites the gaming carve-out from involving to based on
- Sets the threshold at 18, the age Kalshi already uses
- Age estimation cannot confirm whose account is in use
Why a defendant would endorse new regulation
The detail that makes the accusation land is that Kalshi did not fight this bill. It helped launch it. Mansour stood at the Capitol beside Gottheimer and welcomed the requirement, which is not the usual posture of a company facing enforcement actions in more than a dozen states.
That posture makes sense once you look at the litigation. FinanceFeeds tallied the record at 19 wins for states against four for Kalshi across 23 rulings on injunctions and restraining orders, with active restrictions in Nevada, Michigan, Massachusetts and Washington. The company’s one durable victory is federal: the Third Circuit’s April decision in KalshiEX LLC v. Flaherty, which affirmed an injunction stopping New Jersey from enforcing its gambling laws. We unpacked that ruling in our coverage of the first prediction market appeals decision.
Federal preemption is therefore the asset Kalshi is defending, and anything that hardens the federal framework around event contracts strengthens it. A statute that tells the CFTC precisely when a contract is contrary to the public interest does exactly that, whatever else the statute is called.
The money behind the Kalshi child protection bill
Kalshi has spent the past 18 months building a Washington operation to match its legal exposure. CasinoBeats reported that the company spent over $1 million on federal lobbying last year, and that only two gambling groups spent more: the American Gaming Association and the Gila River Indian Community.
CNBC’s review of 2026 disclosures shows the pace accelerating. Kalshi recorded $990,000 in direct lobbying expenditure in the first half of the year and close to $1.8 million once outside firms are counted, spread across seven lobbying operations including an in-house government affairs team. The AGA has responded in kind at $1.39 million so far this year, roughly 30% up on the same stretch of 2025, while Polymarket is tracking towards a repeat of last year’s $360,000.
The donations are smaller but more pointed. According to CasinoBeats, Mansour donated $7,000 to four of the bill’s sponsors, Gottheimer, McDonald Rivet, Panetta and Suozzi, while Kalshi co-founder Luana Lopes Lara donated $7,000 to a fifth, Darren Soto. Five of the nine members behind the bill have taken money from Kalshi executives.
What the rest of the industry says
Six days after the bill launch, the AGA and the Indian Gaming Association appeared before the House Agriculture subcommittee on commodity markets, digital assets and rural development. Their message was that event contracts are sports betting under another name, and that Congress should say so.
“Sports betting on prediction markets makes a mockery of congressional intent. Congress did not want sports betting to be conducted on derivatives markets. These products are sports betting, plain and simple.”
— Christopher Cylke, Senior Vice President of Government Relations, American Gaming Association
The AGA put the cost to states and tribes at more than $1.2 billion in lost gaming tax revenue since sports contracts launched, and told the subcommittee that prediction market operators accounted for 45% of digital sports betting advertising over the first five and a half months of 2026. It asked Congress to classify sports event contracts as gambling and to stop CFTC-registered platforms listing them by self-certification, the same mechanism we examined when 38 states lined up against Kalshi over CFTC rules.
Tribal operators have been making the argument since the spring. Speaking to ICT, California Nations Indian Gaming Association chairman James Siva called prediction markets “the largest and fastest moving threat our industry has ever seen in its 30-plus years of existence.” Indian Gaming Association chairman David Bean was blunter about the framing.
“He will also claim that prediction markets are financial products and not sportsbooks. But no parent of a teenager with a Kalshi app will fall for this lie that it is investing or hedging.”
— David Bean, Chairman, Indian Gaming Association
The age question the bill does not answer
The bill sets its threshold at 18. That is already Kalshi’s minimum age, and it is three years below the standard at most licensed sportsbooks. State regulators, addiction specialists and the NBA have pressed for 21 on event contracts, and this bill does not touch that gap. Kalshi’s own position, published on its Kalshi Truth page, is that the median user is 31 and that under 4% of volume comes from 18 to 21-year-olds. The structural problem is one we covered in our piece on the 18-year-old sports betting loophole.
There is also a mismatch between the remedy and the harm. Age estimation guesses how old the face in front of the camera is. It does not establish whose account that face is logging into. Kalshi identified the problem itself in May, when it said motivated minors “try to circumvent KYC by using family members’ identification.” A facial scan at login does not solve that if the family member is standing there.
What happens next
The bill has nine members behind it and no committee action yet, which in the current Congress means the odds are long. Its significance is less about passage than about position. It establishes a federal template in which the CFTC, not the states, decides what an exchange may list, and it does so under a title that is difficult to vote against.
It also arrives into a crowded field. A competing effort would go the other way entirely, with 12 senators demanding a prediction market ban in the CLARITY Act. Washington’s restriction takes effect on August 5. Whether the Facial Recognition to Protect Children Act moves at all, the fight it has provoked is now about which level of government writes the rules, and the child protection framing is the vehicle rather than the destination.
FAQs
A bipartisan House bill introduced on July 15, 2026 by Rep. Josh Gottheimer with eight cosponsors. It would require licensed online sportsbooks and prediction markets to run a facial age estimation check when a user logs in, or immediately before they place a wager or trade an event contract.
Kalshi says protecting children is a company priority, and chief executive Tarek Mansour appeared alongside Gottheimer at the launch. Critics including gaming attorney Daniel Wallach argue the bill also carries amendments to the Commodity Exchange Act that would make it easier for the CFTC to approve sports and casino event contracts.
Wallach points to language tying the CFTC public interest test to whether a contract materially encourages violence or similar unlawful activity, which would narrow the grounds for rejecting a market. He also flags a change from involving to based on in the gaming provision, which in his reading would leave contracts written on sporting events outside it.
No. It sets the threshold at 18, which is already Kalshi’s minimum age and three years below the standard at most licensed sportsbooks. State regulators, addiction specialists and the NBA have pushed for 21 on event contracts, and the bill does not address that.
Age estimation reads facial structure to guess a user’s age. It does not confirm whose account is being used, so a minor logging into a parent’s verified account with that parent present can still pass. Kalshi has said motivated minors already circumvent its KYC checks using family members’ identification.
The bill explicitly prohibits operators from storing identity or biometric data. It does not, however, set accuracy standards, define how borderline age estimates are handled, or require anti-spoofing protection against photographs and recorded video.
CasinoBeats reported that Kalshi spent over $1 million on federal lobbying in 2025, more than every gambling group except the American Gaming Association and the Gila River Indian Community. CNBC put the first half of 2026 at $990,000 in direct spending and close to $1.8 million including outside firms.
No. It was introduced on July 15, 2026 and awaits committee action. No bill number had surfaced publicly and the full text had not been posted to congress.gov as of July 17, which is why the specific statutory language remains contested.
KEY TAKEAWAYS
- The title is the smallest part of the bill — Wallach counts one use of the word facial across 27 pages, with the bulk of the text amending the Commodity Exchange Act
- Two changes carry the weight — narrowing the CFTC public interest test to violence and unlawful activity, and swapping involving for based on in the gaming provision
- Kalshi helped launch it rather than fight it — an unusual posture for a company that has lost 19 of 23 state court rulings, according to FinanceFeeds
- Federal preemption is the prize — the Third Circuit ruling is Kalshi’s one durable win, and anything hardening the federal framework protects it
- The age gap is untouched — the threshold stays at 18, and age estimation cannot confirm whose account is actually in use
- Nothing is verified against a public text — no bill number has surfaced and the full text was not on congress.gov as of July 17
Sources
- To Protect Children, Gottheimer Introduces New Bipartisan Bill Requiring Facial Recognition Age Verification for Online Sportsbooks — Office of Rep. Josh Gottheimer
- New Research on Adolescent Boys’ Gambling Habits (Betting on Boys) — Common Sense Media
- Kalshi Accused of Using Child Protection Bill to Push Gaming Contracts — CasinoBeats
- Congress targets underage betting with facial age estimation bill — Biometric Update
- Prediction markets and their opponents are spending more to influence Congress in 2026 — CNBC
- AGA urges Congress to curb prediction markets offering nationwide sports betting — Yogonet
- Kalshi Blocked in Washington as States Win 19 of 23 Cases — FinanceFeeds
- Tribal gaming leaders denounce prediction markets ahead of House Committee hearing on Kalshi — ICT
