Prediction market bills are flooding Washington. Are they really necessary?

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Hey all, Liam here.

Prediction markets aren’t just keeping speculators busy — they’re becoming top of mind in Washington.

A slew of new bills is flooding the US capital, all targeting various aspects of the booming prediction market industry.

And all of them were introduced in the last three months.

Ritchie Torres, a New York Representative, presented the Public Integrity in Financial Prediction Markets Act of 2026 in January to block federal officials from trading on prediction markets.

In February, Nevada Representative Dina Titus introduced the Fair Markets and Sports Integrity Act, which seeks to ban outright sports betting on prediction markets.

On March 5, a bill from Democratic senators Jeff Merkley and Amy Klobuchar would formally prohibit senior members of the executive branch from trading on prediction markets entirely.

Another bipartisan bill introduced on March 6 by Representatives Blake Moore of Utah and Salud Carbajal of California aims to rein in insider trading involving sensitive military secrets and democratic processes.

And finally, on Tuesday, California Representative Mike Levin and Democratic Senator Adam Schiff issued the DEATH BETS Act that would ban markets that reference terrorism, assassination, war or the death of an individual.

While they all take on the latest wagering boom, Yesha Yadav, a professor of law and associate dean at Vanderbilt Law School, says these bills zero in on two very key worries.

First, protecting the large number of retail users wagering on these platforms. Second, lawmakers are clearly interested in thwarting insiders from potentially using sensitive information to profit from geopolitical conflicts.

“The most pressing concern here is ensuring that these markets are viewed as safe and capable of protecting participants from predatory traders,” Yadav said.

Same laws, new CFTC

Polymarket and Kalshi are quickly becoming household names.

Last month, Polymarket and Kalshi posted notional volumes of $7.9 billion and $10.4 billion, respectively. Major fintech platforms, such as Robinhood, as well as traditional sports betting companies, like DraftKings, are all diverting resources to roll out equivalent offerings.

The two platforms are also different in one key way.

What people usually think of as Polymarket is its global, offshore platform, which is actually forbidden in the US. American users who attempt to access the offshore version with a virtual private network can even have their accounts revoked.

The company is slowly rolling out a US version after it acquired the derivatives exchange and clearinghouse QCEX for $112 million in 2025.

Kalshi, on the other hand, is regulated by the Commodity Futures Trading Commission.

That’s important because some academics argue that most of the bills circulating in Washington would be redundant. The CFTC already has insider trading laws baked into its mandate, and what they are actually targeting is an offshore platform.

Plus, Michael Selig, the new commissioner, has been very clear that prediction markets already fall well within the agency’s jurisdiction.

“The Commodity Exchange Act gives CFTC authority to regulate these markets however it determines is in the public interest,” Harry Crane, a professor of statistics at Rutgers University, told DL News. “That’s a big reason why the primary examples that are being cited are not from CFTC-regulated markets.”

Others agree that the law may be the same, but prediction markets have exploded in popularity in the last two years.

Likewise, the Commodity Exchange Act may be too vague to effectively rein in the emergent behaviour on these platforms.

“Whatever the law was two years ago, it is the same law today,” Andrew Verstein, a professor of law at UCLA, told DL News.

“But prediction markets have exploded in the meantime. Something has to change on the legal side, both to authorise the market if we want to bless it, and to address its new challenges.”

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.