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New Jersey prediction markets could face wholesale changes if a new bill is passed into law.
The legislation would ban three types of prediction markets, bring others under state regulation, and allow markets governed by the Commodity Exchange Act to follow federal rules. The state would effectively legalize sports event contracts, making them subject to the same rules as traditional sportsbooks.
“This bill provides for the rebalancing of state and federal interests as they relate to prediction markets, which, if left wholly unregulated, would deprive the state of its ability to protect its citizens,” NJ’s Senate Bill 3500 states. “The bill also regulates athletic event markets in the same manner as sports wagering,” the text reads.
“This includes requiring any operator of an athletic event market to either obtain a sports wagering license, or become licensed as a casino service industry enterprise and partner with a sports wagering licensee.”
Sens. Shirley K. Turner and John F. McKeon introduced the bill Tuesday.
How the DGE plans to govern event trading
Sports event contracts have faced scrutiny in the state because they offer the “functional equivalent of a wager, but without regard for the state’s gambling or sports wagering frameworks,” the bill notes.
If the bill passes, sports prediction markets would fall under the jurisdiction of the New Jersey Division of Gaming Enforcement. The bill outlines nine regulations that would govern sports contracts, including the adoption of responsible gaming measures.
Additionally, operators would be responsible for ensuring that all contracts are purchased by users who are at least 21 years old and not on the state’s self-exclusion list.
According to a news report by PlayNJ, the bill also calls for the Division of Gaming Enforcement to launch an advertising campaign to “promote awareness among the general public of issues relating to athletic markets.” The campaign would be required to communicate at least nine concepts, including the legal status of sports event contracts and the differences between sports wagering and athletic markets.
Prohibited markets: Politics, catastrophes, and death
While the bill would legalize sports event contracts, it would outlaw three specific categories:
- Death markets (contracts related to a person’s death)
- Catastrophic event markets (wars, state or national emergencies, mass shootings)
- Political markets
The ban on political markets is significant, as contracts related to President Donald Trump, members of his administration, and other politicians are frequently among the most popular offerings on Kalshi, currently the only legal prediction market in the US.
