Representatives Blake Moore of Utah and Salud Carbajal of California have introduced legislation to prohibit event contracts related to terrorism, assassination, war, gaming, or illegal activity.
The bipartisan legislation aims to strengthen existing law to empower the Commodity Futures Trading Commission (CFTC) to prohibit event contracts that expose the United States to national security, public safety, or insider trading risks, including event contracts based on election outcomes or government activity.
“Under-regulated prediction markets have exposed America to needless public safety and national security risks by allowing traders to invest in outcomes related to sensitive matters like terrorism, assassination, war, or elections,” said Representative Moore. “Prediction markets also sponsor sports-related contracts against the wishes of many states, including Utah, that would otherwise prohibit these contracts if offered as traditional sports betting.
“I am excited to partner with my friend, Rep. Carbajal, on this nonpartisan issue to ensure event contracts can continue to serve legitimate business interests while protecting Americans from risk.”
For states that do not object to sports-related event contracts, the legislation provides a pathway to opt out of the enforcement of the gaming contract prohibition.
Representative Carbajal commented: “Under-regulated prediction markets are creating an environment ripe for insider trading. The monetization of military activities or election processes threatens our national security and further erodes public trust in government.
“The Event Contract Enforcement Act is a strong first step toward protecting consumers and upholding ethical standards across all levels of government. I am committed to working across the aisle to bring transparency and accountability to this under-regulated sector.”
The Event Contract Enforcement Act was introduced in the House of Representatives on Friday, March 6.