US Lawmakers Target Prediction Markets with New BETS OFF Act

American politicians are having another go at shutting down prediction markets, with two Democratic lawmakers introducing fresh legislation this week aimed at what they’re calling “rigged” betting platforms.

Senator Chris Murphy of Connecticut and Representative Greg Casar of Texas unveiled the BETS OFF Act on Tuesday. The bill would ban wagering on government actions, military conflicts, assassinations, terrorism, and other events where someone might have inside knowledge or direct control over the outcome.

The timing’s interesting. This comes barely a week after fellow Democrat Senator Richard Blumenthal rolled out his own similar proposal, the Prediction Markets Security and Integrity Act of 2026. Seems like there’s a proper push on from that side of the aisle to clamp down on these markets.

What the Bill Actually Does

The legislation goes beyond simply banning certain types of bets. It creates new enforcement powers that would let the attorney general seek injunctions against anyone placing, accepting, or facilitating these wagers. The Commodity Futures Trading Commission already has some authority over event contracts related to war and terrorism, granted, but the BETS OFF Act establishes a standalone federal prohibition.

The bill also targets the infrastructure around offshore prediction markets. That means going after payment processors and anyone in the US who promotes or helps run these platforms. Murphy and Casar reckon that’s necessary because many of the markets they’re concerned about operate from overseas.

Suspicious Trading Patterns

What’s sparked this legislative push are some rather eyebrow-raising betting patterns. The lawmakers pointed to well-timed trades placed through anonymous accounts just before US military strikes in Iran and the detention of Venezuelan leader Nicolás Maduro.

Murphy went as far as suggesting Trump administration officials or their associates might have profited from access to classified information.

During Tuesday’s press conference, Murphy highlighted what he sees as the core problem: “Any prediction market where somebody knows or controls the outcome of a bet is ripe for corruption.” Casar added that these exchanges are becoming “yet another place for rich and powerful people to cash in on insider information.”

Not Just About Foreign Policy

Look, the lawmakers made clear their concerns extend beyond geopolitical events. Casar brought up the Super Bowl halftime show as an example, arguing that if you’re betting against someone who already knows which artist is performing, you’re getting a raw deal.

Murphy emphasized the point further: “The people who know who’s going to perform at the Super Bowl, the people who know what words the President is going to use in a speech, are very powerful people.” The implication being that regular punters don’t stand a chance when insiders are in the market.

What Happens Next

The jury’s still out on whether this bill gains traction. The prediction markets industry has grown substantially in recent years, with platforms like Kalshi and Polymarket attracting serious attention and investment. The sector’s likely to push back hard against legislation that would curtail their operations or limit the types of events users can trade on.

What’s certain is that prediction markets have caught the attention of Washington. And not in a good way. With multiple bills now circulating and high-profile examples of suspicious trading being cited by lawmakers, the industry’s facing its most serious regulatory challenge yet in the United States.