Congress bans prediction markets from regulated exchanges—pushing trading underground
H.R. 9856 — Prediction Markets Are Gambling Act · Filed by Steven Horsford (D-NV) · 3 cosponsors · Introduced Jul 22, 2026 · Referred to committee
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What it does
This bill amends the Commodity Exchange Act to ban prediction markets and event contracts tied to sports competitions and casino-style games from being listed, cleared, or traded on registered exchanges. It does not affect state laws that already regulate or prohibit such contracts, and applies to all new contracts entered after the bill's enactment.
Why we flagged it
The bill's operative mechanism is a straightforward prohibition on listing and trading event contracts tied to sports and casino games on registered exchanges. It is a regulatory restriction, not a subsidy, carve-out, or deregulation.
What the text implies
- Banning regulated prediction markets may redirect trading to unregulated offshore platforms or peer-to-peer markets, where consumer protections, price transparency, and fraud prevention are absent or weaker.
- The bill does not prohibit the underlying contracts themselves—only their listing on registered exchanges—so the economic activity may persist outside the regulatory perimeter.
- State law carve-out (subsection C) creates a patchwork: some states may permit such contracts under state law, while federal law bars them from registered exchanges, creating legal ambiguity for multi-state platforms.
- Prediction markets have been used by researchers, traders, and institutions for price discovery and hedging; eliminating a regulated venue may reduce information efficiency in these markets.
- The definition of 'sporting event or athletic competition' is broad and may capture derivatives or hedging instruments tied to sports outcomes that are not themselves gambling.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill restricts access to a speculative financial instrument, which may protect some citizens from gambling-like financial risk and fraud; however, it also removes a regulated, transparent trading venue and may push such contracts into unregulated or offshore markets where consumer protections are weaker. The net effect on ordinary people depends on whether the restriction prevents harmful speculation or simply drives it underground.
Who stands to gain
- offshore and unregulated prediction market platforms
- peer-to-peer betting networks
- state-licensed gambling operators (if state law permits such contracts)
Named in the bill
Commodity Exchange Act, registered entities (exchanges), CFTC (Commodity Futures Trading Commission), state gambling regulators
Where it stands
3 cosponsors: 2 Republicans, 1 Democrats.
- Jul 22, 2026 — Introduced · Congress.gov: “Introduced in House”
- Jul 22, 2026 — Referred to House Committee on Agriculture · Congress.gov: “Referred to the House Committee on Agriculture”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (1,704 characters) on Jul 23, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
As of — page rendered 2026-10-20.
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