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Rep. Jamie Raskin, D-Md., and Sen. Jeff Merkley, D-Ore., unveiled legislation Thursday that would drastically overhaul the prediction market landscape by banning contracts on elections, sports, and military actions.
Bill targets sports, government, and elections
The Stop Corrupt Bets Act, if passed and signed into law by President Trump, would prohibit prediction market contracts on governmental actions, sports, elections, and acts of war. The bill aims to eliminate the specific types of high-stakes wagering that have fueled the industry’s recent explosion in popularity.
While the legislation faces an uphill battle in a divided Congress, Merkley and Raskin are maintaining a “legislative deluge” against prediction markets, drawing a sharp contrast with the Trump administration’s more permissive stance toward the industry.
“The oligarchs and opportunists are using prediction markets like Kalshi and Polymarket to enrich themselves,” Raskin said in his office’s press release.
“Democracy isn’t about insider gambling on our common future; it’s about everyone making our common future together. Placing bets on public policy events informed by insider knowledge spreads civic cynicism and distrust in our democratic institutions.”
Raskin added that by banning bets on legislation and acts of war, Congress can “oppose corrupt attempts to rig our democracy and profit from the fix.”
Meteoric rise meets growing public scrutiny
Event contracts on elections or sports were generally prohibited in the U.S. until 2024. At that time, a lawsuit involving the exchange Kalshi led the U.S. Court of Appeals for the District of Columbia Circuit to greenlight election-based prediction markets.
The industry has seen a meteoric rise since, but public backlash intensified following the introduction of controversially timed contracts regarding Venezuelan President Nicolás Maduro and airstrikes in Iran.
“Recent high-profile instances of bets on war, elections, and other political actions underscore the need for better regulation,” said Donald Sherman, president and CEO of Citizens for Responsibility and Ethics in Washington (CREW).
“The Stop Corrupt Bets Act clarifies and extends the law to the most dangerous types of bets to combat the risk of bad actors circumventing existing state and federal laws.”
The Stop Corrupt Bets Act is cosponsored by Sens. Elizabeth Warren, D-Mass., Chris Van Hollen, D-Md., Richard Blumenthal, D-Conn., and Sheldon Whitehouse, D-R.I. Senate passage would require Republican support to reach the 60-vote threshold, leading many analysts to view the bill as “dead on arrival” in the current session.
