Congress Introduces Wave of Bills Targeting Prediction Markets
A collection of new federal payments concentrating on prediction markets has emerged in Congress, as lawmakers transfer to handle the fast development of occasion contract buying and selling within the United States.
Three separate measures have been launched in March inside days of one another, becoming a member of two different prediction market payments filed earlier this yr. Most of the proposals would amend the Commodity Exchange Act (CEA), the statute that offers the Commodity Futures Trading Commission (CFTC) authority over prediction market platforms and the facility to ban sure varieties of occasion contracts.
The payments launched this yr stem from a spread of considerations concerning the growth of prediction markets, from questions on insider buying and selling to disputes over whether or not sports activities occasion contracts intrude on areas historically regulated by states.
Two of the newest proposals have been prompted by high-profile markets tied to Iran, together with contracts permitting customers to wager on developments involving the nation’s management and potential navy escalation. The markets drew criticism from a number of lawmakers who warned they may create incentives round violent occasions or enable merchants with advance data of authorities actions to revenue. On Tuesday, Sen. Adam Schiff (D-Calif.) launched the DEATH BETS Act, a measure designed to ban federally regulated exchanges from itemizing prediction market contracts tied to issues like struggle and somebody’s demise.
The flurry of proposals displays rising consideration in Washington as prediction markets entice a bigger viewers and extra scrutiny from policymakers. While the measures range extensively in scope, some proposals overlap. Together, they characterize one of the primary sustained makes an attempt by Congress to handle how federal legislation ought to apply to the quickly increasing sector.
Early proposals goal insider buying and selling, sports activities markets
Two earlier payments launched in January and February laid the groundwork for the latest surge of congressional consideration.
The first got here from Rep. Ritchie Torres (D-N.Y.), who launched the Public Integrity in Financial Prediction Markets Act of 2026 (H.R. 7004) on Jan. 9. The invoice would prohibit federal elected officers, political appointees and congressional workers from buying and selling prediction-market contracts tied to authorities coverage, authorities actions or political outcomes once they possess materials nonpublic info.
Torres stated the proposal was prompted by considerations that authorities insiders may revenue from advance data of geopolitical occasions or coverage choices. His workplace pointed to a controversial prediction market commerce that paid out a whole lot of 1000’s of {dollars} shortly after the seize of Venezuelan President Nicolás Maduro, elevating questions on whether the trader had prior knowledge of the operation.
“Using materials nonpublic info to purchase, promote, or commerce occasion contracts is improper, simply as it’s improper for some other monetary funding,” Torres said when saying the laws.
The invoice was referred to the House Committee on Oversight and Government Reform and the House Administration Committee, the place it stays pending.
A month later, Rep. Dina Titus (D-Nev.) launched the Fair Markets and Sports Integrity Act (H.R. 7477), which might amend the CEA to ban federally regulated exchanges from itemizing contracts tied to sporting events or casino-style video games.
Titus has argued that sports-related prediction markets successfully operate as sports activities betting however function outdoors state playing laws. “Consumers deserve transparency, accountability, and protections in opposition to predatory practices,” she said in saying the measure.
The proposal was referred to the House Agriculture Committee, which oversees derivatives markets and the CFTC.
While each payments stay in committee, they helped set the stage for the burst of further proposals launched in March as lawmakers more and more targeted on prediction markets.
Schiff invoice targets markets tied to struggle, demise
The most up-to-date proposal got here March 10, when Sen. Schiff launched the DEATH BETS Act (S.4035), laws aimed toward prohibiting federally regulated exchanges from itemizing contracts tied to violent occasions.
The invoice would amend the CEA to bar contracts that “contain, relate to, or reference” terrorism, assassination, struggle, or the demise of a person. The restriction would apply to buying and selling venues registered with the CFTC.
The CEA already offers the CFTC authority to ban occasion contracts deemed opposite to the general public curiosity, an influence added by the Dodd-Frank Act. Whether these contracts violate the usual is at the moment decided by the Commission. Schiff’s invoice would as an alternative prohibit these classes straight in statute and prolong the ban to contracts tied to an individual’s demise.
“Betting on struggle and demise creates an surroundings through which insiders can revenue off of labeled info, our nationwide safety is jeopardized, and violence is inspired,” Schiff stated in a statement saying the laws. “Congress should clarify that these demise bets are unequivocally prohibited.”
The proposal follows controversy over prediction markets tied to Iran’s management. One high-profile contract requested whether or not Iran’s Supreme Leader, Ayatollah Ali Khamenei, can be “out of workplace” by a specified date and drew greater than $20 million in buying and selling on Kalshi before being halted. After experiences emerged that Khamenei had been killed, many merchants anticipated the market to resolve to “Yes.” Instead, the trade paused buying and selling and later settled positions based mostly on the final traded value earlier than the demise, citing an present rule stopping merchants from profiting straight from demise. The episode triggered backlash from customers and intensified debate amongst policymakers over whether or not markets tied to demise must be allowed.
Kalshi signaled assist of Schiff’s efforts on social media.
Schiff’s workplace stated Rep. Mike Levin (D-Calif.) plans to introduce a companion measure within the House, making the laws a bicameral effort. Schiff’s invoice has been referred to the Senate Committee on Agriculture, Nutrition and Forestry.
Merkley, Klobuchar goal insider buying and selling in prediction markets
Another March proposal takes a unique method, focusing not on which contracts could be listed however on who can commerce them.
On March 5, Sen. Jeff Merkley (D-Ore.) and Sen. Amy Klobuchar (D-Minn.) launched the End Prediction Market Corruption Act (S.4017), laws aimed toward stopping senior authorities officers from buying and selling on prediction markets. The bill would amend the CEA to prohibit the president, vp and members of Congress from shopping for or promoting occasion contracts. It would additionally bar senior government department officers from buying and selling on markets tied to issues they oversee as half of their authorities duties.
Under the invoice, the Attorney General may convey civil enforcement actions in opposition to violators, who may face penalties of as much as $10,000 per violation and the return of any earnings from the commerce.
Merkley stated the proposal was prompted by experiences of unusually worthwhile prediction market trades tied to geopolitical developments and navy actions.
“When public officers use nonpublic info to win a wager, you have got the right recipe to undermine the general public’s perception that authorities officers are working for the general public good, not for their very own private earnings,” Merkley said when introducing the invoice.
The proposal overlaps with the sooner Public Integrity in Financial Prediction Markets Act launched by Rep. Torres, which equally targets insider buying and selling dangers tied to authorities officers and policy-related markets. Like Schiff’s invoice, S.4017 was additionally referred to the Senate Agriculture Committee following its introduction.
Event Contract Enforcement Act seeks broader limits on occasion contract varieties
Introduced the identical day because the Merkley/Klobuchar proposal, one other March invoice takes a broader method to limiting prediction-market contracts themselves. The Event Contract Enforcement Act (H.R. 7840) was launched on March 5 by Rep. Blake Moore (R-Utah) and Rep. Salud Carbajal (D-Calif.).
One provision of the invoice would prohibit federally regulated exchanges from itemizing occasion contracts tied to elections or authorities actions. The lawmakers argue these varieties of markets are notably weak to insider info as a result of authorities officers or different politically-connected folks could have advance data of choices that might transfer contract costs. In a news release saying the invoice, Moore additionally stated these markets expose “America to useless public security and nationwide safety dangers.”
The laws additionally addresses sports activities occasion contracts, an space that has drawn rising criticism from state regulators and the sports activities betting business. Rather than banning them outright, like Rep. Titus’ invoice, the Event Contract Enforcement Act would enable states to “choose out of the enforcement of the gaming contract prohibition, permitting them to decide on whether or not to permit sports-related contracts inside their borders.”
H.R. 7840 has been referred to the House Committee on Agriculture.
Uncertain path ahead for prediction market laws
Despite the latest wave of proposals, the prospects for any of the payments advancing are unsure.
Most of the payments launched to date have come from Democratic lawmakers, with Rep. Moore’s proposal standing because the lone Republican-backed invoice among the many group. In a carefully divided Congress and underneath a Republican administration that has typically emphasised monetary innovation and lighter-touch regulation of rising markets, laws led primarily by Democrats may face an uphill path.
Another hurdle is the committee course of. The latest proposals have largely been referred to the House and Senate agriculture committees. Legislation usually can not advance until committee management schedules hearings or markups. Those committees are at the moment chaired by Sen. John Boozman (R-Ark.) within the Senate and Rep. Glenn “GT” Thompson (R-Pa.) within the House, and neither has signaled plans to prioritize laws concentrating on prediction markets.
The proposals additionally take completely different approaches to regulating prediction markets. Some search to ban particular classes of contracts, similar to these tied to struggle, demise, elections or sports activities, whereas others deal with limiting who can commerce them. With lawmakers pursuing completely different angles, consolidating assist round a single legislative framework could show troublesome.
For now, the latest spate of payments seem extra more likely to form the controversy in Washington over prediction markets than to provide instant adjustments to federal legislation.
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