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Lawmaker pushes bill to bar prediction-market trades tied to terrorism, elections
Summary
A lawmaker introduced H.R. 7840 on the House floor, proposing to strengthen the Commodity Exchange Act and direct the Commodity Futures Trading Commission to ban event contracts tied to terrorism, assassination, war, gaming, criminal behavior, elections and government actions.
A lawmaker on the House floor introduced H.R. 7840, the bipartisan Event Contract Enforcement Act, proposing new limits on online prediction markets that allow trading on terrorism, assassinations, war and elections.
The lawmaker said the bill would direct the Commodity Futures Trading Commission to prohibit event contracts tied to terrorism, assassination, war, gaming or criminal behavior and would ban trading on election outcomes and government activities to protect elections from manipulation. “Our classified military strike should not provide an opportunity for betters to play or profit,” the lawmaker said.
The speaker described how prediction markets differ from traditional betting, saying traders buy shares in outcomes and profit if the market moves in their favor rather than through bookmaker odds. As evidence of what the lawmaker called risky behavior, the speech cited an episode in which “just hours before the United States military strikes in Iran, more than 150 accounts made investments of over $1,000 in event contracts” and said six traders “together [made] over $1.2 million.”
The lawmaker cited a separate January example in which “one investor netted over $400,000 on Nicolás Maduro's fall from power,” saying such timely purchases show how event contracts can produce outsized profits. The speaker also said sports betting remains illegal in 19 states but that some platforms avoid state rules by offering event contracts, naming Koshi and Poly Market as examples.
The bill, the lawmaker said, aims to preserve legitimate uses of event contracts while closing a perceived loophole in the Commodity Exchange Act that preempts state regulation of event contracts offered as financial instruments. “This loophole has opened a door to gambling on anything from Taylor Swift's appearance at a Kansas City Chiefs game to the United States might launch a strike on Cuba,” the lawmaker said.
H.R. 7840 is introduced as a legislative vehicle to strengthen enforcement and clarify that event contracts tied to national-security or election-related outcomes are subject to prohibitions. The lawmaker said they look forward to moving the bill through the legislative process and yielded back the remainder of their time.
No vote or formal action on the bill was recorded during the speech.
