In a bipartisan effort to effect change around how the federal government regulates prediction markets, Republican Rep. Blake Moore of Utah and Democratic Rep. Salud Carbajal of California last Thursday filed a bill that would make event contracts on assassination, war, terrorism, gambling, and politics illegal.
Assassination, war, terrorism, and gambling contracts are already explicitly banned by the Commodity Exchange Act (CEA), and prohibited in regulation by the Commodity Futures Trading Commission (CFTC). Yet prediction markets have been self-certifying sports event contracts at dizzying rates since January 2025 with no pushback from the agency. And some U.S. and international prediction markets have offered contracts on the Iran situation and the removal of former Venezuelan President Nicolas Maduro from power.
Most recently, Kalshi has attempted to thread the needle on what a “death” contract is, and CEO Tarek Mansour is now arguing that war contracts are illegal, which could undermine the company’s argument that sports contracts are legal.
The bill, however, goes beyond what the CEA initially prohibited by adding elections to the banned list. Ironically, it was a fall 2024 decision that allowed Kalshi to offer its first election contracts that opened the door for the proliferation of sports event contracts. The company unexpectedly won the right to offer markets on the presidential election.
Since then, U.S. sports betting regulators have been exploring ways to keep prediction markets out of their states, some state-licensed wagering operators have added prediction markets, and other state-licensed betting operators have firmly called sports event contracts illegal. The industry as a whole is waiting for a definitive solution, which will come either from the courts (where Kalshi alone is party to at least 10 lawsuits) or Congress.
Congress spitballing many possibilities
The bill, HB 7840, is at least the fourth congressional attempt to rein in prediction markets in general and sports events contracts in particular. Also on March 5, Senators Jeff Merkley and Amy Klobuchar introduced the “End Prediction Market Corruption Act,” which would ban the president, vice president, and members of Congress from trading event contracts. It would also prohibit non-elected “senior executive-branch officials” from trading on contracts related to their work.
A day earlier, Democratic Rep. Gabe Vasquez offered up an amendment to the CEA in a House Committee on Agriculture markup session on HR 7567, the Farm, Food, and National Security Act of 2026, that would “reaffirm that prediction market platforms cannot offer event contracts on sports events or casino-style gambling activities,” per Pechanga.net. The amendment was not approved.
In January, Democratic Rep. Ritchie Torres of New York floated a proposal that would limit federal government officials’ ability to trade on prediction markets.
In a press release about the most recent bill, Moore’s office wrote that the goal is so “event contracts can continue to serve legitimate business interests, while protecting Americans from the safety and national security risks of dangerous or otherwise problematic event contracts.” In essence, the proposal would return prediction markets to their initially intended purpose — to offer contracts on commodities such as corn, oil, orange futures, or soybeans.
“Under-regulated prediction markets have exposed America to needless public safety and national security risks by allowing traders to invest in outcomes related to sensitive matters like terrorism, assassination, war, or elections,” Moore said via press release. “Prediction markets also sponsor sports-related contracts against the wishes of many states, including Utah, that would otherwise prohibit these contracts if offered as traditional sports betting.”
All forms of gambling are illegal in Utah, but the state legislature there is still considering a bill that would explicitly ban proposition betting.
Here’s the relevant text
Carbajal, in the press release, said that the rise of contracts on war, in particular, “further erodes public trust in government,” and he said the platforms are “ripe” for insider trading.
The bill itself is shy of four pages, and includes the following language:
EVENT CONTRACTS.—Subject to clause (ii), it shall be unlawful to list or make available for trading on or through a registered entity an agreement, contract, transaction, or swap in an excluded commodity that is based on an occurrence, the extent of an occurrence, or a contingency (other than a change in the price, rate, value, or level of a commodity described in section 1a(19)(i)) in relation to— ‘‘(I) activity that is unlawful under Federal or State law; ‘‘(II) terrorism; ‘‘(III) assassination;‘‘(IV) war; ‘‘(V) gaming;‘‘ (VI) the result of any vote in an election (as defined in section 301 of the Federal Election Campaign Act of 1971) held under Federal, State, or local law, including a ballot initiative or referendum; ‘‘(VII) conduct by or in any level or branch of the Federal Government
or of any State or local government, including by or in any instrumentality or by any personnel of any level or branch of any such government; or ‘‘(VIII) other similar activity de14 termined by the Commission, by rule or regulation, to be contrary to the public interest.
The bill was immediately assigned to the Committee on Agriculture, but no hearing date has been set.
