Minnesota Senator Pushing To Ban Prediction Markets

Prediction markets are under fire. Again. But… this one is interesting.

Look, we’ve seen states to try to ban them, and protect their legal betting industry. We’ve seen some agencies say it shouldn’t be federally legal in the first place. But this new bill is aimed at the executive branch of the United States, and how they use prediction markets.

You’re going to want to keep reading this article because it’s essentially a shot across the bow to the Trump administration. We’ll break it all down below!

End Prediction Market Corruption Act Unveiled

This is a great bill name if we do say so ourselves. And it’s courtesy of two Senators — Jeff Merkley (Democrat from Oregon) and Amy Klobuchar (Democrat from Minnesota, where sports betting is off limits). The two just revealed it in early March, and it’s putting top lawmakers in the crosshairs. The bill is proposing to ban the president, vice president, Congress, and a few other senior executive branch officials from using prediction markets for real-world outcomes.

Let’s call it what it is, an attempt to stop insider trading. Prediction markets have made doing so incredibly easy, evidenced by two recent examples. When the US used military force in both Venezuela and Iran this year, heavy bets came in the nights before that ended up paying handsomely.

The fear is that this spreads to any and all world events. Elections. New policies. It’s all on the table and prone to insider information.

“When public officials use nonpublic information to win a bet, you have the perfect recipe to undermine the public’s belief that government officials are working for the public good, not for their own personal profits,” Merkley said in a statement announcing the bill.

The act would penalize insider trading by top government officials heavily. Penalties would start at 10,000, before going up. But if we’re being honest, it needs to be higher. Way higher. Ten grand is peanuts when there’s the potential to make hundreds of thousands of dollars, if not millions, from insider trading on these markets.

Moreover, the bill would also give the Commodity Futures Trading Commission more authority to police insider trading in prediction markets. As is, there’s just about no policing. Critics find that weird, given how deep compliance offices go for top sports betting apps, who are always on the lookout for suspicious activity.

An Open Shot To Trump Administration

Prediction markets have been around a few years, but it was really only til 2025 that they caught on. This was largely from sports “contracts”, but yes, world events have also helped them become mainstream.

This explosive growth has largely come during the second term of President Donald Trump. Not really seen as a beacon of ethics to begin with, many critics believe his administration is behind the insider trades as of late. It’s only speculation, but you can see why that is.

Donald Trump Jr. has direct ties with Polymarket, adding fuel to the fire. He serves as an “advisor” to the company. Not only that, his venture capital firm, 1789 Capital, has invested millions of dollars into Polymarket. While Jr. doesn’t have an official executive position (and wouldn’t be affected if the bill passed), you have to believe he has some sway with the bigwigs.

No one should be surprised that the new bill is being pushed by two Democrats from a pair of states that are overwhelmingly left-leaning. But they are not alone. Senator Chris Van Hollen (Democrat from Maryland), Adam Schiff (Democrat from California), and Kirsten Gillibrand (Democrat from New York) cosponsored the bill with them.

There are zero Republicans co-sponsoring it. Zero! That’s why it’s unlikely to pass Congress this year since it’s controlled by the GOP. Midterms are later this year, and if polls are correct, Democrats are likely to re-take the House. That would give this bill a more likely chance to pass, but again, that has to wait til 2027.

Prediction Markets Catching Heat Elsewhere

The hits don’t stop coming for prediction markets. Though, the top market makers are likely more worried about outright state bans than politicians being barred from using them. This too, is picking up as of late.

In New Jersey, lawmakers recently rolled out a new bill to reign in prediction markets. The proposal would force platforms offering event contracts to follow the state’s sports betting rules, instead of operating in their own legal lane. Vermont is going even further with lawmakers there introducing legislation that would ban prediction markets altogether.

Many of these states, plus others like Nevada (who’ve made similar moves to ban), argue that prediction markets are just sports betting in a new wrapper. Few are buying the mirage of “event contracts” that these prediction platforms are peddling.

Of course, prediction platforms counter back by saying they’re federally regulated derivatives markets, which means the Commodity Futures Trading Commission oversees them. Yadda yadda yadda. That’s been the song and dance we’ve heard for the last year, and no one has ruled anyone right or wrong yet.

Nothing likely changes as long as Republicans control all of Congress or some major scandal breaks that puts the industry under a bigger microscope. Until then, we continue to do the usual dance and song.