Sen. Blumenthal Introduces Measure to Regulate Prediction Markets

US Sen. Richard Blumenthal of Connecticut has spearheaded a new measure seeking to toughen the prediction markets regulations amid growing concerns about the emerging vertical. The Senator emphasized that prediction markets have become a haven for fraud and must be reined in.

Blumenthal Introduces the Prediction Markets Security and Integrity Act

Blumenthal’s Prediction Markets Security and Integrity Act seeks to impose prediction markets rules on a federal level. Co-sponsored by New Jersey Sen. Andy Kim, the measure would introduce prohibitions on insider trading, which has been a major concern throughout most of the prediction markets’ existence.

The Act would also address other concerns, such as match manipulation and event contracts tied to war, death, and military action. It would furthermore introduce mandatory age requirements and a ban on advertising prediction markets to underage players.

In addition to that, the Act would reverse a CFTC ruling that sought to preempt state gambling regulations.

Putting Guardrails on an “Out-of-Control Industry”

Senator Blumenthal argued that the absence of federal or state safeguards has essentially turned prediction markets into a “haven for insider trading, market manipulation, and underage gambling.” He also slammed prediction markets for turning war into a casino game and thus creating a market for national security leaks.

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.

Sen. Richard Blumenthal

Senator Kim added that prediction markets are allowing corruption and exploitation to thrive, while a select few win big at the expense of working Americans. He argued that this necessitates basic guardrails and safeguards to get this “unregulated industry” under control.

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.

Sen. Andy Kim

The full text of the bill is available on Blumenthal’s official webpage.

In the meantime, US tribal organizations just discussed the threats of prediction markets to the established tribal gaming industry.