The feds are coming for prop bets.

Senator Brian Schatz of Hawaii announced this week that federal legislation targeting sports prop betting could be introduced in 2026. After a year of scandals involving NBA players, MLB pitchers, and various gambling schemes, Washington has apparently seen enough.

The Quick Hit

• Who: Senator Brian Schatz (D-Hawaii)
• What: Federal legislation to regulate prop betting
• When: Expected 2026
• Why: Terry Rozier case, Guardians pitch-fixing scandal, general integrity concerns
• The quote: "We need federal protections to stop prop betting that gives a single bad actor the ability to manipulate a specific, singular outcome"

Why Schatz Is Acting Now

2025 has been a nightmare for sports betting integrity. Terry Rozier is facing federal charges for allegedly tipping off bettors about his injury status. Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz were arrested for allegedly rigging individual pitches so bettors could win on ball-or-strike props.

The common thread? Prop bets on individual player outcomes create incentives for corruption that don't exist with traditional moneyline or spread betting.

If you bet on whether a team wins, you'd need to fix an entire game. If you bet on whether a pitcher throws a first-pitch ball, you just need that one guy.

What Federal Legislation Might Look Like

Schatz hasn't released specific language yet, but his statement points toward restricting or eliminating certain types of prop bets — particularly those involving singular outcomes that one person can control.

This could mean the end of:

• First-pitch ball/strike props
• Whether a specific player will foul early in a game
• Individual play-by-play props that don't require team cooperation

The sportsbooks won't love this. Prop bets drive massive action. They're the parlays that make DraftKings and FanDuel their money. But the corruption potential is obvious, and Schatz is betting that integrity concerns outweigh operator profits in Washington.

The State vs Federal Question

Right now, sports betting regulation happens at the state level. Each state with legal betting has its own rules about what props are allowed. Some have already restricted certain player props.

Federal legislation would override this patchwork and create uniform rules. Whether that's constitutional — whether Congress can regulate specific betting types in states that have legalized gambling — is a question for the lawyers.

But Schatz seems confident enough to announce the effort publicly.

Industry Response

The sportsbook industry hasn't responded formally to Schatz's announcement. They're currently dealing with the prediction markets fight, the AGA breakup, and state-level tax battles.

Adding federal prop betting restrictions to the list of concerns would be significant. The American Gaming Association typically opposes federal intervention in state gambling matters, but the AGA just lost DraftKings and FanDuel as members.

Who speaks for the sports betting industry at the federal level is an open question.

The Bottom Line

Prop betting as we know it might have an expiration date. Senator Schatz is the first major federal lawmaker to publicly commit to legislation, and the scandals keep giving him ammunition. If you love betting on whether a player will record an assist in the first quarter or whether a pitcher will throw a first-pitch strike, enjoy it while you can.