Senator Richard Blumenthal has thrown another hat into the regulatory ring with fresh legislation aimed squarely at prediction markets. The Connecticut Democrat introduced the Prediction Markets Security and Integrity Act on Tuesday, marking the latest in a wave of Congressional efforts to bring oversight to an industry that’s been operating in something of a Wild West scenario.

Co-sponsored by Senator Andy Kim of New Jersey, the bill proposes federal consumer protections whilst handing regulatory authority back to individual states. Blumenthal’s characterised the sector as an “out-of-control industry” that’s turned global events into what he calls a “casino game”, creating opportunities for insider trading and market manipulation without proper safeguards.

What the Bill Actually Does

The proposed legislation gets specific about market integrity. It would prohibit anyone from using material, non-public information for private gain on these platforms, requiring operators to develop and publish rules preventing manipulation and deceptive practices. The bill explicitly states that individuals and operators cannot create or participate in listings that present a conflict of interest.

There are outright bans too.

Markets on war, military action, or death would be prohibited entirely, alongside any other matters the Attorney General deems contrary to public interest. For younger users, the bill mandates age verification and bans advertising directed at under-21s.

Affordability Checks and Spending Limits

One element that’ll interest UK observers is the inclusion of affordability protections. The bill would ban credit card deposits outright and require an “affordability check” before users can wager more than $1,000 in 24 hours or $10,000 over 30 days. Territory familiar to anyone following the ongoing affordability debate in British gambling regulation.

Senator Kim framed the legislation as closing gaps where “corruption and exploitation are thriving”, arguing that manipulation leaves working Americans on the losing end whilst a select few profit.

Part of a Broader Push

Blumenthal’s bill arrives just one day after Senator Adam Schiff introduced the DEATH BETS Act, separate legislation that would amend the Commodity Exchange Act to prohibit contracts relating to war, death, and similar activities. These are areas the Commodity Futures Trading Commission can already block as contrary to public interest, though Schiff’s bill would make the prohibition explicit.

Since January, lawmakers in both chambers have introduced multiple bills targeting prediction markets, signalling that Capitol Hill has these platforms firmly in its sights. The flurry of legislative activity reflects an ongoing debate about whether prediction markets should be treated as financial derivatives exchanges or regulated like traditional gambling products. Or, frankly, something else entirely.

Under Blumenthal’s proposal, the Attorney General would approve state wagering programmes that meet minimum federal standards, creating a framework that combines federal oversight with state-level implementation. An approach that acknowledges America’s traditional state-by-state gambling regulation whilst attempting to establish baseline protections across the board.

Whether any of these bills gain traction remains to be seen, but the volume of proposals suggests prediction markets face a considerably more regulated future than their current relatively free-wheeling operation.