House bill targets controversial prediction event markets

"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. 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."

"Prediction markets let people buy and sell contracts that pay out depending on how real-world events unfold. For years, those tools were commonly used in industries such as agriculture to hedge against uncertainty. But Moore and Carbajal say the industry has moved far beyond that original purpose."

"Under-regulated prediction markets are creating an environment ripe for insider trading. The monetization of military activities or ele"

U.S. Representatives Blake Moore (R-Utah) and Salud Carbajal (D-California) introduced the Event Contract Enforcement Act to regulate prediction markets. These platforms allow trading contracts based on real-world events, originally used in agriculture for hedging. However, lawmakers argue the industry has expanded to include contracts tied to terrorism, armed conflicts, elections, and sports competitions. They contend this creates national security and public safety risks by incentivizing manipulation and enabling insider trading. Moore warns that under-regulated markets expose America to unnecessary risks, while Carbajal emphasizes concerns about profiting from privileged government or military knowledge.

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