Senators Jeff Merkley and Elizabeth Warren, as well as Representative Jamie Raskin, have introduced the Stop Corrupt Bets Act to ban the trading of event contracts on elections, government actions, war and sports.
The legislation follows multiple efforts from US lawmakers to regulate prediction market operators, such as the Prediction Markets Are Gambling Act introduced on March 23 and the Death Bets Act brought forth on March 11.
The Stop Corrupt Bets Act would also view such markets as working "against the intent of federal law which regulates contract trading" and returns authority to oversee prediction market operations to state government bodies.
Merkley, Warren and Raskin’s bill additionally requires the Government Accountability Office to conduct a study on prediction markets and the potential for insider trading.
“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,” Merkley said.
“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.”
The Prediction Markets Are Gambling Act was introduced to prohibit operators registered under the Commodity Futures Trading Commission (CFTC) from offering any contracts which resemble a sports bet or casino-style game.
Senators Adam Schiff and John Curtis stated CFTC-registered entities currently provide a “wide range” of sports prediction contracts which are “indistinguishable” from gambling.
The Death Bets Act would impose a statutory ban on event contracts linked to armed conflict, assassinations, terrorism or individual deaths on exchanges registered with the CFTC.
Under current law, the Commodity Exchange Act already allows the CFTC to block certain event contracts if they are deemed contrary to the public interest. However, the decision ultimately depends on regulatory discretion, which can shift depending on the agency’s leadership.
The proposed legislation would remove that discretion by creating an explicit prohibition on such activity.
Better Collective confirmed it will roll out prediction market-focused hubs across Action Network and VegasInsider on March 19, scaling content around probability-based topics such as sports, politics and entertainment
