Blumenthal Introduces New Legislation to Regulate Prediction Markets

[WASHINGTON, DC] - Today, U.S. Senator Richard Blumenthal (D-CT) introduced new legislation to prevent abuse and fraud in prediction markets. Prediction markets have grown into a multi-billion-dollar unregulated industry, ignoring state gambling laws while operating businesses identical to traditional sportsbooks by letting people bet on real-world events.

In the absence of federal or state safeguards, prediction markets have harbored insider trading, market manipulation, underage gambling, and leaks of national security information. The Prediction Markets Security and Integrity Act addresses these issues by establishing federal consumer protections and returning regulatory authority to the states. The Prediction Markets Security and Integrity Act is cosponsored by U.S. Senator Andy Kim (D-NJ).

"Prediction markets have become a haven for insider trading, market manipulation, and underage gambling. These billion-dollar businesses are turning war into a casino game, and creating a market for national security leaks," said Blumenthal. "My measure-the Prediction Markets Security and Integrity Act-puts guardrails on this out-of-control industry. It bans dangerous and unethical bets and protects consumers from fraud and other predatory practices."

"Corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets. This manipulation leaves the select few winning big, at the expense of working Americans. By instating basic guardrails and safeguards through this legislation, we can better protect consumers and safeguard against real threats to our national security coming out of this unregulated industry," said Kim.

Specifically, the bill:

• Enacts federally-enforced rules on insider trading and market manipulation;

• Bans prediction market listings related to war, death, and military action;

• Requires that states offering a sports betting program meet minimum federal standards with respect to advertising, affordability, and artificial intelligence;

• Requires age verification and a ban on advertising to underage individuals or individuals on the self-exclusion list; and

• Reverses the Commodity Futures Trading Commission's attempt to preempt state gambling regulations.

Blumenthal previously introduced legislation to create nationwide consumer protections and standards for the mobile sports gambling industry. Last year, Blumenthal reintroduced the Supporting Affordability and Fairness with Every Bet (SAFE Bet) Act alongside U.S. Representative Paul D. Tonko (D-NY). The SAFE Bet Act requires states offering sports betting to meet minimum federal standards in the categories of marketing, affordability and Artificial Intelligence to create a safer, less addictive product. Blumenthal also reintroduced the Gambling addiction Recovery, Investment, and Treatment (GRIT) Act, with U.S. Representative Andrea Salinas (D-OR). The GRIT Act dedicates federal funds to studying, preventing, and treating gambling addiction in America.

The full text of the Prediction Markets Security and Integrity Act is available here. A one-pager is available here.

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