Sen. Jeff Merkley (D-Ore.) speaks during an overnight marathon speech press conference in the Senate chamber of the U.S. Capitol on October 22, 2025, in Washington, DC.
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Amid increased scrutiny of the popular platform, a group of congressional Democrats introduced a bill Thursday that would ban betting on prediction markets on elections, government actions, wars, sports and more.
The bill, sponsored by Sen. Jeff Merkley of Oregon, Elizabeth Warren of Massachusetts, and Rep. Jamie Raskin of Maryland, comes after a series of ill-timed bets on world events, including the ouster of Venezuelan President Nicolas Maduro and the war with Iran, raised questions about prediction markets such as Carsi and Polimarket.
“When someone can use prediction markets to place well-timed bets on Congressional legislation, government decisions, or military strikes, corruption flourishes and undermines public trust,” Merkley said in a statement. “The STOP Corrupt Gambling Act restores the original purpose of prediction markets and prevents these markets from further eroding our democratic institutions and turning them into casinos.”
The bill imposes broader restrictions on the market than most other legislative measures and is the latest in a series 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) are collaborating on a bill that would ban sports prediction market contracts, arguing that they amount to gambling and are effectively unregulated.
Carsi criticized Schiff and Curtis’ proposal in a statement to CNBC on Wednesday, saying, “It’s clear this bill is motivated by the interests of casinos threatened by competition. They’re more concerned about protecting monopolies than they are about protecting consumers.”
A bipartisan House group introduced a bill Wednesday that would ban 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., announced their own proposal to similarly prevent elected officials from getting rich on prediction markets.
Amid growing enthusiasm from lawmakers, Calci and Polymarket announced new insider trading protections on their platforms this week.
In addition to outright banning certain prediction market activities, Merkley, Warren and Raskin’s latest proposal would make it clear that these markets are contrary to the intent of federal law regulating contract trading and return the power to regulate gambling to the states, Merkley said.
At least 20 lawsuits have been filed by states and gaming regulators arguing that prediction markets provide a loophole for gambling and should be regulated by states.
The new bill would also require the Government Accountability Office, Congress’s nonpartisan, independent watchdog, to conduct investigations into prediction markets and insider trading.
Disclosure: CNBC and Kalsi have a commercial relationship that includes a minority investment in CNBC.
