Senator Jeff Merkley (D-OR) speaks at a press conference on his marathon overnight speech on the Senate floor at the U.S. Capitol Building on October 22, 2025 in Washington, DC.
Andrew Harnik | getty images
A group of congressional Democrats introduced legislation Thursday that would ban prediction market bets on elections, government actions, war and sports as scrutiny on the popular platforms intensifies.
Sens. Jeff Merkley, D-Ore., and Elizabeth Warren, D-Mass., and Rep. Jamie Raskin, D-Md., are leading the measure, which comes after a series of well-timed bets placed on world events — including the ouster of Venezuelan President Nicolas Maduro and war in Iran — that have raised questions about prediction markets like Kalashi and PolyMarkets.
“When anyone can use prediction markets to place bets on the exact moment Congress will pass a bill, government decision, or military attack, it is ripe for corruption and erodes the public trust,” Merkley said in a statement. “The Stop Corrupt Bets Act restores the original intent of prediction markets and prevents these markets from further destroying our democratic institutions and turning them into casinos.”
The bill, which would impose broader limits on markets than most other legislative measures, is the latest in a flurry of proposals to rein in prediction markets, which have recently exploded in popularity and allow users to bet on a variety of events.
Sens. Adam Schiff, D-Calif., and John Curtis, R-Utah, have teamed up on a measure to ban sports prediction market contracts, which they argue is akin to gambling and virtually unregulated.
Kalshi criticized Schiff and Curtis’ proposal in a statement to CNBC on Wednesday, saying, “It is clear that this bill is driven by casino interests that are threatened by competition. They are more concerned about protecting their monopoly than protecting consumers.”
A bipartisan house group Legislation was introduced on Wednesday to bar members of Congress, the President and other executive branch officials from trading in certain prediction markets. Earlier this month, Merkley, along with Sen. Amy Klobuchar, D-Minn., introduced her own proposal that would prevent elected officials from getting rich from prediction markets.
As lawmakers turn up the heat, Kalash And polymarket Both announced new insider trading protections on their platforms this week. Kalshi states that it does not allow markets involving war or death.
Spokespeople for both forecast markets did not immediately respond to requests for comment Thursday morning.
In addition to a complete ban on specific prediction market activity, the latest proposal from Merkley, Warren and Raskin would make it clear that these markets go against the intent of the federal law that regulates contract trading and, according to Merkley, would return the power to regulate gambling to the states.
At least 20 lawsuits have been filed by states and gaming regulators, arguing that prediction markets offer gambling loopholes and should be state-regulated.
The new bill would also require that the Government Accountability Office – Congress’s non-partisan, independent watchdog – conduct a study on prediction markets and insider trading.
Disclosure: CNBC and Kalshi have a commercial relationship that includes a CNBC minority investment.