Representatives Blake Moore (R-UT) and Salud Carbajal (D-CA) have introduced bipartisan legislation aimed at tightening oversight of prediction markets. The Event Contract Enforcement Act is designed to protect Americans from safety and national security risks associated with event contracts while preserving legitimate business uses.
New Safeguards For Prediction Markets
Prediction markets allow investors to buy and sell contracts based on future outcomes, historically serving industries like agriculture to hedge against losses. Recently, contracts linked to terrorism, assassination, war, gaming, elections, and government activity have raised serious concerns. Critics argue these instruments incentivize insiders to leak sensitive information, enable criminals to profit from illicit acts, and pose national security risks.
“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 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.”
Carbajal added, “Under-regulated prediction markets are creating an environment ripe for insider trading. […] The Event Contract Enforcement Act is a strong first step toward protecting consumers and upholding ethical standards across all levels of government.”
How The Legislation Works
The bill would require the Commodity Futures Trading Commission (CFTC) to prohibit contracts involving terrorism, assassinations, war, gaming, elections, and government functions. It builds on existing authority granted by the Commodity Exchange Act and the 2010 Dodd-Frank Act, which allow the CFTC to restrict contracts deemed contrary to public interest.
A key feature of the Act is giving states the ability to “opt out” of the gaming contract prohibition. This allows states to decide whether sports-related contracts can be legally offered within their borders, balancing federal oversight with local control.
Event contracts linked to government or military activity could encourage insider trading or incentivize the misuse of sensitive information. Contracts connected to illegal activity create incentives for crimes to occur in order to profit. Election-based contracts may encourage attempts to manipulate outcomes, raising ethical and security concerns.
Support And Related Efforts
The legislation has drawn praise from tribal leaders and consumer advocacy groups, including the Gambling Is Not Investing coalition. Former Congressman Mick Mulvaney stated, “These so-called prediction markets are nothing more than a backdoor for unregulated gambling. They are unilaterally making online sports gambling widely available without consumer protections, age restrictions, or state tax oversight.”
Moore and Carbajal cited incidents on Polymarket, where traders profited hundreds of thousands from political and geopolitical events, as examples of risks their legislation addresses. Other lawmakers, including Sens. Amy Klobuchar and Jeff Merkley, have introduced complementary bills targeting insider trading in prediction markets.
The Act represents a bipartisan effort to reinforce accountability, safeguard Americans, and ensure that prediction markets serve legitimate purposes while preventing misuse for gambling, insider trading, or national security threats.
Source:
“Representatives Moore, Carbajal Introduce Bipartisan Bill to Regulate Prediction Markets”, blakemoore.house.gov. March 6, 2026
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