Date of publication: March 13, 2026, 09:35h.
Last revised on: March 13, 2026, 09:35h.
- Proposed federal law aims to empower states to control the types of prediction market trading permitted
- The Prediction Markets Security and Integrity Act will also raise the minimum trading age from 18 to 21
Senator Richard Blumenthal (D-CT) is championing federal legislation designed to stop the US Commodity Futures Trading Commission from allowing prediction markets it oversees to bypass state gambling regulations.
In collaboration with Senator Andy Kim (D-NJ), Blumenthal has introduced the Prediction Markets Security and Integrity Act this week. This legislation would restore regulatory power over sports betting to individual states, a privilege recognized in a pivotal 2018 U.S. Supreme Court ruling.
Recently, the CFTC under the previous Trump administration has made moves to solidify the authority of prediction markets to offer trading on sports event contracts.
Many state legislators, attorneys general, and gambling regulators assert that sports contracts in prediction markets amount to sports betting. CFTC Chair Michael Selig—appointed by President Donald Trump—argues that prediction markets are evolving, offering innovative opportunities that allow investors to leverage their insights for financial rewards.
Federal Prediction Markets Legislation
The proposed legislation by Blumenthal and Kim would remove the CFTC’s authority to override state gambling laws.
“This Act does not preempt or limit the authority of any State or Indian Tribe to enact, adopt, promulgate, or enforce any laws, rules, regulations, or other measures regarding online prediction markets that are more stringent than this Act, including any laws that prohibit an online prediction market from operating within the State or Tribal jurisdiction,” reads the proposal.
Prediction markets are facilitating sports trades in various states where sports betting is prohibited, such as California and Texas. Despite the ban, residents can access numerous prediction markets that allow trades on outcomes of events like tonight’s men’s college basketball games, the Players Championship, and the ATP Indian Wells Championship. The CFTC maintains these transactions are financial in nature, not gambling.
While the CFTC has long prohibited bets on war outcomes, this new bill seeks to strip the CFTC of that power.
“Prediction markets have become a breeding ground for insider trading, market manipulation, and underage gambling. These billion-dollar industries are turning war into a gamble and setting up a marketplace for national security breaches,” remarked Blumenthal.
“My legislation aims to impose safeguards on this uncontrolled sector. It prohibits hazardous and unethical betting and aims to protect consumers from fraud and exploitation,” he continued.
Emphasis on State Rights
The Act proposed by Blumenthal and Kim would permanently prevent the CFTC from allowing prediction markets to handle contracts that are vulnerable to manipulation, related to military actions, or violate state or federal laws.
This legislation would empower states to make determinations on the types of trades available in prediction markets.
Additionally, Blumenthal and Kim aim to increase the minimum age for engaging in prediction market trading from 18 to 21. Responsible gaming advocates have noted a rise in outreach calls from younger individuals since prediction markets began offering sports trading in early 2025.