Lawmakers Introduce Facial Recognition Bill for Sportsbooks and Prediction Markets With Kalshi’s Support

Rep. Josh Gottheimer, D-N.J., introduced bipartisan legislation Wednesday that would require online sportsbooks and prediction markets to use facial recognition technology to verify users’ ages before they can place bets or trades.

The proposed Facial Recognition to Protect Children Act would require betting platforms to use technology that analyzes facial structure and patterns to estimate a user’s age when they log in or before they place a wager. Gottheimer’s office said the technology would not store users’ identities or personal biometric information.

The bill is backed by prediction market operator Kalshi and parents’ advocacy group ParentsRISE. It has gathered bipartisan support with co-sponsors Representatives Jeff Van Drew, Nick LaLota, Kristen McDonald Rivet, Jimmy Panetta, Darren Soto, Tom Suozzi, Ritchie Torres and Bruce Westerman.

“We’re asking our kids to self-police their way past a system built entirely on the honor code,” Gottheimer said in a statement.

A kid can log into a parent’s, an older sibling’s, or a friend’s account and place a bet with no verification at all.”

Kalshi CEO Tarek Mansour said protecting minors was “a top priority” for the company. He added that age verification should become an industry standard.

Gottheimer’s office said the rapid expansion of sports betting has heightened concerns about underage gambling. The congressman cited research from Common Sense Media showing that 36% of boys ages 11 to 17 gambled in the past year.

The release also pointed to rising reports of underage betting in states such as Iowa and Tennessee. In the latter, sportsbooks flagged more than 400 underage accounts in 2024, up from roughly 100 in 2023.

Kalshi Has Expanded Consumer Protection Measures

As prediction markets have faced growing scrutiny over youth participation, marketing practices and consumer protections, Kalshi has rolled out a series of voluntary safeguards to prevent underage access and promote responsible trading.

In May, the company introduced Face ID checks intended to prevent minors from accessing parents’ accounts. The company also implemented two-factor authentication, expanded selfie verification requirements and introduced additional protections for users aged 18 to 21.

Kalshi also introduced proof-of-funds requirements for certain users and additional prompts encouraging deposit limits and responsible trading.

The company has also published resources for parents and families. Kalshi also pledged $2 million to support trader health and safety initiatives through a partnership with the National Council on Problem Gambling.

Gotthemeier’s legislation aims to turn some of these safeguards into a nationwide standard for sportsbooks and prediction markets.

It would require many online sportsbooks and prediction market platforms to adopt technologies that are not currently part of their standard account verification procedures.

While operators such as DraftKings and FanDuel conduct know-your-customer (KYC) checks and verify a user’s identity and age when an account is created, they generally do not require facial recognition each time a user logs in or places a bet. Some states, such as Ohio and Pennsylvania, do require two-factor authentication for every login.

There have been efforts at the state level to require biometric checks for every login. One example is New York, where the state gaming regulator has published two draft regulations containing proposed protections.

Bill Arrives Amid Debate Over Prediction Markets’ Lower Age Limits

The legislation also comes as prediction markets face growing scrutiny over their lower minimum age requirements. Unlike regulated online sportsbooks, which generally require a minimum age of 21, prediction markets require a minimum age of 18.

Multiple state regulators, addiction experts, and sports leagues such as the NBA have called for the minimum age for certain event contracts to be raised to 21. They have argued that the current framework creates a regulatory gap that allows younger users to access gambling-like products that would otherwise be unavailable through most regulated sportsbooks.

The issue has attracted increasing attention as prediction markets have gained popularity among college students and young adults.

Multiple reports this year have raised concerns among addiction experts about the accessibility of gambling-like products to younger users. Prediction market operators have also faced criticism over social media marketing campaigns and partnerships with influencers and campus organizations.

The debate has become increasingly prominent in Washington in recent months. Lawmakers have introduced over two dozen bills this year aimed at issues ranging from youth protections and advertising practices to insider trading and conflicts of interest in prediction markets.

Federal Gambling Standards Have Historically Struggled to Advance

The proposal is also the latest attempt to establish nationwide standards for gambling, an area traditionally regulated at the state level.

Most efforts have focused on imposing national standards on sports betting advertising. New York Representative Paul Tonko has sponsored legislation in three straight years, but his efforts have seen limited interest among lawmakers.

Massachusetts Gaming Commission Chair Jordan Maynard is another figure who supports federal oversight. Maynard has said on multiple occasions that gambling advertising could be addressed at the federal level through national guidelines.

Calls for federal involvement have also extended beyond consumer protections. Earlier this year, Former Chicago Mayor and U.S. Ambassador to Japan, Rahm Emanuel, unveiled a proposal to impose a 10% federal tax on online gambling and prediction markets.

No proposal on federal oversight of gaming has gained much traction. Whether the Facial Recognition to Protect Children Act gains support remains uncertain. Still, the legislation represents the latest sign that lawmakers are increasingly viewing prediction markets and traditional sportsbooks through the same consumer protection lens.