The legislative effort to prevent prediction markets from offering event contracts tied to political events is continuing to grow with the introduction of a new bill.
Sen. Chris Murphy and Rep. Greg Casar introduced the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, adding to recent pieces of legislation filed by lawmakers that aim to ban the trading of certain event contracts.
The BETS OFF Act proposes prohibiting prediction markets from offering event contracts on government actions, terrorism, assassinations and wars. The piece of legislation would amend the Commodity Exchange Act and require the Commodity Futures Trading Commission (CFTC), the regulator of prediction markets, to outlaw the prohibited markets.
“For example, the bill would ban prediction markets on when Ayatollah Khamenei would be ‘out’ as Supreme Leader, regardless of whether this is understood to be betting on war or death, because the question regards a government action,” said Casar and Murphy.
In addition to outlawing political event contracts, the BETS OFF Act also prohibits trading on any event that has an outcome “under the complete control of any person.” The bill also bars event contracts that have an outcome that is “known by any person in advance.”
The prohibition would apply to event contracts tied to award shows and even the Super Bowl halftime show, as mentioned by Murphy and Casar in a press release about the bill.
“Our legislation is pretty simple. It simply says that these markets cannot allow people to make bets on government decision-making and frankly on other instances where there is one single individual who controls and knows the outcome of a market,” said Murphy during a press conference regarding the piece of legislation.
Murphy and Casar have introduced the BETS OFF Act after several geopolitical trading incidents on Polymarket that raised concerns about insider trading.
A breakdown of other prediction market bills in Congress
Murphy and Casar add to a growing list of lawmakers who are making a legislative effort to curtail the availability of certain event contracts.
Earlier this month, Reps. Blake Moore and Salud Carbajal filed the Event Contract Enforcement Act, proposing a ban on event contracts involving terrorism, assassinations, war, gaming, elections and government activities.
The two Congressmen introduced the piece of legislation to protect Americans from national security risks associated with the “problematic” event contracts. In addition to the event contract ban, the bill also allows states to “exempt themselves from the prohibition on gaming contracts.” A provision that focuses on controversial sports event contracts.
Another piece of legislation, the End Prediction Market Corruption Act, takes a different approach by prohibiting government officials from using their access to insider information to trade on prediction markets. The ban on event contract trading would extend to U.S. Presidents, Vice Presidents, members of Congress, and other public officials.
New York Rep. Ritchie Torres has introduced a similar bill. His Public Integrity in Financial Prediction Markets Act aims to prevent elected officials, political appointees, and executive branch employees from trading event contracts related to government policy or action.
Tennessee Sen. Ferrell Haile has introduced a measure that includes similar principles to Murphy and Casar’s bill regarding outcomes. Haile has filed Senate Bill 1992, a piece of legislation that considers influencing the “outcome of an event” that has ties to a prediction market a Class E felony.
