California Senator Adam Schiff and Utah Senator John Curtis have introduced new bipartisan legislation, dubbed as the Prediction Markets Are Gambling Act, to prohibit operators registered under the Commodity Futures Trading Commission (CFTC) from offering any contracts which resemble a sports bet or casino-style game.
“Sports prediction contracts are sports bets — just with a different name. And yet, these contracts have been offered in all 50 states in clear violation of state and federal law,” Schiff said.
“Rather than enforce the law, the CFTC is greenlighting these markets and even promoting their growth. It’s time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon Tribal sovereignty and offers no public revenue. I’m proud to partner with Senator Curtis to put a stop to these illegal markets.”
Schiff and Curtis stated CFTC-registered entities currently provide a “wide range” of sports prediction contracts which are “indistinguishable” from gambling.
The US Senators also called attention to the trading volume already generated by sports events contracts, including over $100m on the March Madness college basketball tournament and $1bn for Super Bowl LX.
According to the release, such contracts “evade state and Tribal consumer protections” and are currently offered in states where gambling is either restricted or prohibited entirely.
“Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators,” Curtis said.
“Our bipartisan legislation clarifies regulatory jurisdiction, ensuring that states can maintain their authority over sports betting and casino gaming. The Prediction Markets Are Gambling Act is about respecting states’ authority, protecting families and keeping speculative financial products out of spaces where they don’t belong.”
Schiff previously raised concerns over the dangers of “death contracts,” including offerings on whether Iran’s Ali Khameni would be “out as Supreme leader” from multiple operators.
On March 11, Schiff and California Representative Mike Levin introduced legislation that would prohibit prediction contracts tied to war, terrorism and individual deaths, titled the Discouraging Exploitation of Tragedy and Harm in Event Systems Act, or Death Bets Act.
Just days prior, Oregon Senator Jeff Merkley and Minnesota Senator Amy Klobuchar filed the End Prediction Market Corruption Act, which aims to “crack down” on potential insider trading efforts in event contract wagering.
The End Prediction Market Corruption Act would prohibit US government officials such as the President, Vice President and members of Congress from trading event contracts. Any violations of the legislation would result in civic penalties of $10,000, administered by the US Attorney General.
The CFTC issued a prediction markets advisory in regards to the listing of event contracts for trading purposes on March 12, as well as requested public opinion on the need for additional regulations
