Prediction markets face scrutiny
Lawmakers are debating tighter rules for prediction platforms like Kalshi and Polymarket, turning these markets into a live regulatory experiment with implications for liquidity, pricing and product design. That makes them fertile ground for causal inference studies on regulation and market efficiency. (semafor.com)
A bipartisan Senate measure co-sponsored by Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah) would amend the Commodity Exchange Act to ban CFTC-registered platforms from listing contracts tied to sporting events or casino-style games, text announced March 23, 2026. (nbcnews.com(nbcnews.com)) (nbcnews.com) A separate bill led by Sens. Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.) and Rep. Jamie Raskin (D-Md.) would prohibit prediction-market contracts on elections, war, and government actions, introduced March 26, 2026 as the “STOP Corrupt Bets Act.” (cnbc.com(cnbc.com)) (cnbc.com) The Public Integrity in Financial Markets Act of 2026, unveiled by Sens. Elissa Slotkin (D-Mich.) and Todd Young (R-Ind.) with cosponsors including Schiff and Curtis, would bar the president, members of Congress, staffers and political appointees from trading on prediction platforms using non‑public information. (politico.com(politico.com)) (politico.com) Kalshi’s regulatory track record includes a CFTC written disapproval of its “congressional control contracts” after a June 12, 2023 filing and a subsequent federal-court ruling on Sept. 6, 2024 that vacated the CFTC order and allowed Kalshi to list certain election-based contracts. (cftc.gov(cftc.gov)) (cftc.gov) Polymarket resolved a CFTC enforcement action in January 2022 with a $1.4 million civil monetary penalty and requirements to wind down off‑exchange binary options contracts after the agency found the markets constituted unregistered swaps. (cftc.gov(cftc.gov)) (cftc.gov) Industry scale cited by analysts shows event‑contract volumes exceeded roughly $40 billion in the prior year, a figure lawmakers referenced when proposing federal and state restrictions in March 2026. (marketplace.org(marketplace.org)) (marketplace.org) State responses are proliferating: California’s governor issued a directive barring high‑ranking state officials from using inside information to trade on prediction markets on March 27, 2026, while Illinois lawmakers have proposed a $1 million licensing fee and other penalties targeting operators. (bloomberg.com(bloomberg.com)) (bloomberg.com)
