Merkley: Proposed CFTC Rule Falls Woefully Short of Reining in Insider Trading and Corruption on Prediction Markets

Washington, D.C. - Oregon's U.S. Senator Jeff Merkley-who has led the charge to oppose insider trading and corruption on prediction markets-released the following statement after the Commodity Futures Trading Commission (CFTC) announced proposed rules on event contracts:

"Unchecked corruption on prediction markets is a bad bet for democracy and undermines trust in our leaders and institutions. While the CFTC's proposed rule on event contracts that could be against the public interest tries to give guidance to the industry, the agency fails to crack down on the explosion of gambling on prediction markets, continues to allow dangerous election betting, and seems to cement the interests of prediction market companies rather than the public interest.

"Since 2023, I have been sounding the alarm over Wall Street firms setting up massive markets that could demolish the integrity of our democracy by prioritizing profit over the public interest. Now, we have seen the consequences of allowing bets on the outcomes of elections, military actions, and government actions without any economic value. Under this rule, event contracts would continue to exist on all these issues-even allowing for bets on rescue missions of U.S. military personnel.

"With thousands of races up and down the ballot in every state across the country, the fast-approaching 2026 midterm elections are ripe for corruption on prediction markets. Allowing unfettered election gambling reduces our democracy to a horse race for the wealthy and powerful to bet on.

"I urge the CFTC to finalize a strong rule that fully tackles the challenges presented by these markets, and I'm ready to work with Republicans and Democrats alike to protect the integrity of our democracy."

Merkley has long sounded the alarm over the dangers that prediction markets pose to our democracy. Previously, he urged the Trump Administration's CFTC to draft a strong rule reining in insider trading and betting on elections, war, and government actions.

He also wrote the STOP Corrupt Bets Act to ban betting through prediction markets on issues that are against the public interest and have no economic value, such as elections, government actions, sports, and military actions. Merkley introduced the End Prediction Market Corruption Act to prevent the President, Vice President, Members of Congress, and other public officials from trading event contracts, curbing the potential for insider trading and conflicts of interest.

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