New legislation from Nevada Rep. Dina Titus is the latest legislative effort to halt the spread of sports-focused prediction markets in the U.S.
The Co-Chair of the Congressional Gaming Caucus announced her Fair Markets and Sports Integrity Act, which aims to prevent platforms from allowing contract trading on sporting and casino-style events.
“Prediction markets should not be able to circumvent state gaming laws,” Titus wrote in a statement. “Consumers deserve transparency, accountability, and protection against such predatory practices. That is why I introduced the Fair Markets and Sports Integrity Act to prevent entities from engaging in transactions involving sporting or casino-style event contracts.”
Protecting state gaming rights
Titus officially introduced her bill, numbered HR 7477, on Tuesday and it has been referred to the House Committee on Agriculture. Its summary notes it would amend the Commodity Exchange Act (CEA) to prohibit transactions on sporting event or casino-style gaming contracts.
The full bill of the text was not publicly available at the time of writing. But, in effect, the effort is intended to halt the spread of federally regulated financial markets that closely resemble the kind of gambling that is regulated at a state level.
The inclusion of “casino-style” contracts is noteworthy as that is not an area that has typically been explored to date. PENN Entertainment CEO Jay Snowden mused in an earnings call last year whether prediction market platforms might explore offering contracts “on the next spin of a slot machine, the next hand of blackjack.”
For now, Titus filed her federal bill in Congress amid ongoing furor around prediction markets’ expansion into sports over the last year.
Leading prediction market platforms Kalshi, Crypto.com and Polymarket have all argued in court that their products are swaps and should be regulated at the federal level in a way that pre-empts state gaming regulations. As well as those platforms, major state-regulated sportsbooks and other gaming operators such as FanDuel, DraftKings, Fanatics, PrizePicks and Underdog all offer sports event contracts in some states, often through partnerships with marketplaces like Kalshi.
Another Congressional prediction markets bill
Titus’ bill is one of the most high-profile so far, but a raft of bills have been introduced at both the federal and state levels aimed at restraining and restricting prediction markets.
Another Democrat member of Congress, New York Rep. Ritchie Torres, introduced the Public Integrity in Financial Prediction Markets Act in early January. His bill focuses specifically on banning federal elected officials, political appointees and executive branch employees from trading on contracts related to any government policy or action or political outcome when the individual possesses or could obtain nonpublic information via their official duties.
New York, New York, New York
At the state level in New York, there are at least three active bills targeting prediction markets. One, from Assemblymember Phil Steck, is similar to Torres’ bill in that it would restrict the use of prediction markets by certain public officers when using information they gain in the course of their official duties.
Meanwhile, Asm. Clyde Vanel’s A925 would amend Empire State law to ban prediction markets on “catastrophic events, politics, deaths, securities and athletic events.” It would also impose firm rules on such platforms in the state, including an age limit of 21, adding responsible gambling safeguards like self-exclusion and deposits and spending limits and implementing a ban on using credit cards. And Vanel also wants to ban event contracts that
That bill, titled the Oversight and Regulation of Activity for Contracts Linked to Events Act (ORACLE Act) was referred to a New York Assembly committee in November.
And in the New York Senate, Sen. Jeremy Cooney’s S8889 would require any prediction market operator seeking to offer event contracts to apply for a license from the state Department of Financial Services to operate a prediction market.
Hawaii movement leads charge elsewhere
Elsewhere, the effort is gathering steam.
Just last week, a Hawaii House committee became the first U.S. legislative committee to officially approve a bill aimed at banning prediction markets entirely.
Members of the Committee on Consumer Protection and Commerce unanimously approved House Bill 2198, which would add the buying and selling of securities and commodities and similar financial products on sports, games of skill and chance, politics, catastrophe and death to its definition of gambling, which is expressly prohibited in the Aloha State.
Illinois has also stepped up to the plate in recent days with two bills in the House.
Rep. Daniel Didech, who is chair of the Illinois House Gaming Committee, filed HB 5142 on Feb. 5, aiming to add prediction markets on sports to the state definition of sports wagering. That would thus require platforms offering sports contracts to apply for a sports wagering license. Another state representative, Rep. Edgar Gonzalez, filed HB 5059 on Feb. 4 to ban prediction markets on sports, as well as implement numerous limitations and requirements on platforms offering other event contracts.
Other states such as Iowa and Connecticut also have legislation in play. The Iowa bill would legally require prediction market platforms to pay $10 million for a license and hand over 20% of the revenue they make on event contracts trading, while the governor-led Connecticut measure focuses on ensuring prediction market trading is only available to people aged 21 or older.
