Pennsylvania lawmakers have introduced legislation establishing a legal framework for prediction markets without imposing a tax. House Bill 2711 sets operating standards, adds consumer safeguards and assigns enforcement responsibilities.
Introduced on July 22 by Rep. Tarik Khan and more than two dozen bipartisan co-sponsors, the bill would create a new chapter within Pennsylvania law dedicated to prediction markets. It has been referred to the Consumer Protection, Technology and Utilities Committee.
Consumer Safeguards
The proposal would limit participation to individuals at least 21 years old. Operators would have to block self-excluded individuals, platform employees and anyone with access to material nonpublic information.
The legislation would ban contracts involving high school sports or other events featuring minors, markets based on an individual’s health status and so-called death markets covering an individual’s death, assassination, attempted killing or mass casualty events.
HB 2711 also targets insider trading and market manipulation. The bill states: “No person shall, directly or indirectly, knowingly or recklessly, use material nonpublic information or engage in fraudulent or manipulative conduct to obtain a financial benefit through a prediction market.”
Operators would also have to implement “commercially reasonable and technically feasible” measures to detect fraud, manipulation and misuse of nonpublic information while reporting suspicious activity to the Attorney General and law enforcement.
Enforcement Provisions
The proposal would separate prediction markets from certain gaming businesses by restricting providers whose liquidity providers or market makers knowingly engage in gaming activity. It also limits certain market-making and revenue-sharing arrangements involving gaming entities, although it does not specify how those provisions would affect prediction market platforms affiliated with sportsbooks.
The Attorney General and local district attorneys would enforce the law instead of the Pennsylvania Gaming Control Board.
Operators violating the law could face civil penalties. The bill states: “A provider that violates this chapter, or a regulation, rule or order adopted under this chapter, shall be liable for a civil penalty not to exceed $10,000 for each violation.
“If a court of competent jurisdiction determines that the provider has engaged in persistent course of conduct in violation of this chapter, the court may impose a civil penalty not to exceed $50,000 for each violation.”
Courts could also order providers to stop operating in Pennsylvania. Companies that continue operating after an injunction could face fines of up to $1 million per day.
States Pursue Different Models
Pennsylvania joins several states addressing prediction markets through different policies. Minnesota broadly prohibited prediction markets covering sports and politics. Kentucky and Illinois combined regulation with taxation, while Illinois also requires exchanges to obtain state licenses.
North Carolina imposed a tax on net trading revenue without creating a dedicated regulatory framework. Tennessee made it a felony to intentionally influence the outcome of an event tied to a prediction market contract without establishing broader operating rules.
Rep. Danilo Burgos has also introduced separate legislation regulating prediction markets in Pennsylvania, including a proposed 20% tax on operators. Meanwhile, HB 2711 awaits further consideration in the Consumer Protection, Technology and Utilities Committee.
Source:
“Pennsylvania Bill Proposes New Regulatory Approach for Prediction Markets”, gamblinginsider.com, Jul 23, 2026
The post Pennsylvania Sets Rules for Prediction Markets first appeared on RealMoneyAction.com.