Legislative Push Against Prediction Markets in the U.S.

Two lawmakers, Democratic Senator Chris Murphy of Connecticut and Democratic Representative Greg Casar of Texas, have introduced the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act. This bill aims to prohibit prediction market trading on sensitive topics such as terrorism, assassination, and war, as well as non-financial government actions. Murphy emphasized the need for consumer protection, stating, "Wouldn't the government protect consumers from markets that were transparently rigged?" The bill seeks to amend existing laws to block payments to offshore prediction market platforms and impose criminal penalties on domestic promotion of these markets.

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In a parallel effort, Minnesota has introduced Senate File 4511, which represents one of the most stringent proposals regarding prediction markets in the United States. This bipartisan bill, sponsored by Senator John Marty, would criminalize the operation of prediction markets, categorizing them as felonies rather than civil matters. Marty stated, “We must stop prediction markets from taking over here if the federal courts won’t stop them.” The legislation targets not only the markets themselves but also advertising and promotional activities related to them, particularly those that could mislead younger audiences.

Minnesota Could Jail Prediction Market Operators Under New Bill

Both the BETS OFF Act and Minnesota's Senate File 4511 reflect growing concerns about the integrity and ethical implications of prediction markets. Murphy and Casar argue that these markets can be manipulated by powerful entities, undermining public trust. The Minnesota bill extends its reach to various forms of betting, including sports and catastrophic events, and imposes severe penalties on operators and facilitators of prediction markets.

Minnesota Could Jail Prediction Market Operators Under New Bill

Legal experts have raised concerns about the effectiveness of state-level legislation against prediction markets, suggesting that such efforts may be premature. Gaming attorney Daniel Wallach noted that ongoing federal litigation regarding the regulation of prediction markets could render state laws ineffective. He warned that Minnesota's proposed law might inadvertently provide grounds for prediction markets to challenge the state in federal court, complicating enforcement efforts.

Minnesota Could Jail Prediction Market Operators Under New BillBusiness Insider

Murphy and Casar have expressed confidence that public sentiment will support their legislative efforts, with Casar stating, "When people get on their phone and see these prediction markets, they expect that there are rules to make sure the game isn't rigged against them." Conversely, critics like Wallach argue that these legislative measures could be counterproductive, emphasizing the need for clarity from federal courts before states enact restrictive laws.

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The BETS OFF Act has been introduced in Congress, while Minnesota's Senate File 4511 has been referred to the Senate Judiciary and Public Safety Committee, which has yet to schedule a hearing. With the Minnesota legislative session concluding in mid-May 2026, time is limited for the bill's passage. As these legislative efforts unfold, the future of prediction markets in the U.S. remains uncertain, caught between consumer protection concerns and the complexities of legal jurisdiction.

Minnesota Could Jail Prediction Market Operators Under New Bill