A bill which would ban prediction market bets on elections, sports and military and government actions has been introduced by Maryland representative Jamie Raskin and Senator Jeff Merkley of Oregon.
The Democrat politicians have argued that those with knowledge of government plans have been taking advantage of prediction markets to enrich themselves via “insider gambling”.
They claimed the subject matters included in the proposed ban had no value for business investments and were not commodities.
Event contracts were originally created as a financial instrument for US industry in 1992, to be used for hedging against potential losses.
Raskin and Merkley said the bill seeks to clarify that markets on political and sporting events are against the intent of the Commodity Exchange Act, and that the Commodity Futures Trading Commission (CFTC) should prohibit markets with no commercial hedging value.
Part of the Act would involve the independent Government Accountability Office (GAO) conducting a study on prediction markets, insider trading and offshore illegal bets.
Raskin commented: “The oligarchs and opportunists are using prediction markets like Kalshi and Polymarket to enrich themselves.
“But democracy isn’t about insider gambling on our common future, it’s about everyone making our common future together.
“Placing bets on public policy and political events informed by insider knowledge and insider manipulation spreads civic cynicism and distrust in our democratic institutions.
“By banning bets on elections, legislation, acts of war and other government actions, we can oppose corrupt attempts to rig our democracy and profit from the fix, and we can redeem public faith in the idea that government is an instrument for the common good and not a casino.”
Merkley added: “When anyone can use prediction markets to make a well-timed bet on Congress passing a bill, government decisions or a military strike, it’s ripe for corruption and erodes public trust.
“The STOP Corrupt Bets Act restores the original intent of prediction markets and prevents these markets from further eroding our democratic institutions and turning them into a casino.
“I’m ready to work with my colleagues on both sides of the aisle to crack down on this bad bet for democracy and restore our vision of government [as] ‘of, by and for the people,’ not government ‘of, by and for the powerful.’”
The introduction of the new bill follows the filing of bipartisan legislation that aimed to ban sports event contracts from being offered by US senators Adam Schiff and John Curtis.
At the beginning of March, analytics firm Bubblemaps revealed six individuals made $1.2m with Polymarket betting on the timing of the US strikes on Iran, raising concerns over insider trading.
Concerns were also raised when traders made significant sums of money around the US intervention in Venezuela when President Nicolás Maduro was removed from power and extradited to the US to face drug trafficking charges.
Over 20 federal suits have been filed by states against platforms such as Polymarket and Kalshi for offering products that resemble gambling without a gambling licence.
Last week, Kalshi was hit with criminal charges for that reason by Arizona’s Attorney General.
The post Bill introduced to ban prediction markets on political and sporting events first appeared on EGR Intel.
Presented to both the Senate and House of Representatives, the STOP Corrupt Bets Act aims to return event contracts to their “original intent”
The post Bill introduced to ban prediction markets on political and sporting events first appeared on EGR Intel.