Sen. Jeff Merkley (D-OR) speaks at a news conference on his marathon overnight speech on the Senate floor at the U.S. Capitol Building on Oct. 22, 2025 in Washington, DC.<\/p>\n
Andrew Harnik | Getty Images<\/p>\n
A group of congressional Democrats<\/a> on Thursday introduced legislation that would ban prediction market<\/a> bets on elections, government actions, war and sports, as scrutiny on the popular platforms intensifies.<\/p>\n Sens. Jeff Merkley<\/a>, D-Ore., and Elizabeth Warren<\/a>, D-Mass., and Rep. Jamie Raskin<\/a>, D-Md., are leading the measure, which comes after a series of well-timed bets placed on world events \u2014 including the ousting of Venezuelan President Nicolas Maduro and the war in Iran \u2014 raised questions about prediction markets like Kalshi<\/a> and Polymarket<\/a>.<\/p>\n “When anyone can use prediction markets to make a well-timed bet on Congress passing a bill, government decisions, or a military strike, it’s ripe for corruption and erodes public trust,” Merkley said in a statement. “The\u00a0STOP Corrupt Bets Act\u00a0restores the original intent of prediction markets and prevents these markets from further eroding our democratic institutions and turning them into a casino.”<\/p>\n The bill, which would impose broader limitations on the markets than most other legislative measures, is the latest in a flurry of proposals to rein-in prediction markets, which have exploded in popularity of late and allow users to place bets on a variety of events.<\/p>\n Read more CNBC politics coverage<\/p>\n Sens. Adam Schiff<\/a>, D-Calif., and John Curtis<\/a>, R-Utah, have teamed up on a measure<\/a> to ban sports prediction market contracts, which they argue is tantamount to gambling and goes virtually unregulated.<\/p>\n Kalshi criticized Schiff and Curtis’ proposal in a statement to CNBC on Wednesday, saying, “It’s clear this bill is motivated by casino interests that are threatened by competition. They’re more worried about protecting their monopolies than protecting consumers.”<\/p>\n A bipartisan House group<\/a> on Wednesday introduced legislation barring members of Congress, the president and other executive branch officials from trading in certain prediction markets. Merkley earlier this month, along with Sen. Amy Klobuchar<\/a>, D-Minn., introduced his own proposal that would similarly block elected officials from getting rich off prediction markets. <\/p>\n As lawmakers turn up the heat, Kalshi<\/a> and Polymarket<\/a> both announced new insider trading protections on their platforms this week. Kalshi says it does not allow markets related to war or death.<\/p>\n Spokespeople for both prediction markets did not immediately respond to a request for comment Thursday morning.<\/p>\n In addition to an outright prohibition on specific prediction market activity, Merkley, Warren and Raskin’s latest proposal would clarify that these markets are against the intent of federal law that regulates contract trading and would return the power of regulating gambling to the states, according to Merkley. <\/p>\n At least 20 lawsuits have been filed by states and gaming regulators arguing that prediction markets offer a gambling loophole and should be state-regulated.<\/p>\n The new bill would also require that the Government Accountability Office \u2014 Congress’ non-partisan, independent watchdog \u2014 conduct a study on prediction markets and insider trading.<\/p>\n Disclosure: CNBC and Kalshi have a commercial relationship that includes a CNBC minority investment.<\/p>\n