Bipartisan Event Contract Enforcement Act Aims To ‘Constrain’ Prediction Markets, But Leaves Sports Up To States 

Newly proposed federal legislation will attempt to close the loophole that has allowed prediction-trading platforms to offer sports contracts and other ethically dubious markets.

On March 6, Reps. Blake Moore (R-UT) and Salud Carbajal (D-CA) introduced the Event Contract Enforcement Act (ECEA). The bill explicitly bans the trading of all event contracts related to sports, terrorism, assassination, war, election outcomes, or illegal activity.

If passed, the ECEA would require the Commodity Futures Trading Commission (CFTC) to enforce a ban on all prohibited categories.

Specifically, the ECEA would: 

Prohibit event contracts based on terrorism, assassination, war, gaming, illegal activity, election outcomes, government activities, or other activities determined by the Commodity Futures Trading Commission to be contrary to the public interest.

“However, states would have the right to opt out of the prohibition on gaming contracts. The exemption carveout would allow individual states to ‘choose whether to allow sports-related contracts within their borders.'”

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Act Offers ‘Strong First Step’

In their announcement, Reps. Moore and Carbajal said their bill would strengthen existing law to “ensure event contracts continue to serve legitimate business interests” while protecting Americans. 

Event contracts, they noted, are “longstanding financial instruments” that many industries, like farming, use as insurance against potential losses. However, they added prediction markets have recently offered contracts that expose Americans to national security, public safety, or insider trading risks. 

Under-regulated prediction markets, said Moore, have exposed America to needless risk by allowing trade on “sensitive matters like terrorism, assassination, war, or elections.”

Sports-related predictions, he added, run contrary to many state laws — including his home state.

Prediction markets also sponsor sports-related contracts against the wishes of many states, including Utah, that would otherwise prohibit these contracts if offered as traditional sports betting. I am excited to partner with my friend, Rep. Carbajal, on this nonpartisan issue to ensure event contracts can continue to serve legitimate business interests while protecting Americans from risk.”

Meanwhile, Carbajal, while declaring his commitment to the non-partisan effort, focused on the threat of insider trading inherent in under-policed markets. 

Under-regulated prediction markets are creating an environment ripe for insider trading. The monetization of military activities or election processes threatens our national security and further erodes public trust in government. The Event Contract Enforcement Act is a strong first step toward protecting consumers and upholding ethical standards across all levels of government. I am committed to working across the aisle to bring transparency and accountability to this under-regulated sector.”

Moore: States Can Opt Out of Prohibiting Sports Contracts

If the ECEA is enacted, Moore clarified, event contracts related to terrorism, assassination, war, gaming, illegal activity, elections, and government functions would be prohibited. State legislatures and governors, however, would be able to opt out of enforcing the prohibition on gaming contracts before it takes effect. The exemption would allow sports-related contract trades within those borders. 

While the 19 states that ban sports betting, including Utah, “mostly view prediction markets as a loophole to circumvent state law,” Moore said in an email to Gambling Insider, “we know that there are states that may be okay with the current framework, so we want to still provide an opportunity for the states to self-govern on the non-national security-related topics.”

Moore said that states could opt in or out again at any time.

We put this legislation forward because activity in this space is starting to spiral out of control, and we need to ensure we have proper guardrails in place. We shouldn’t be investing in outcomes related to national or personal security. It’s a dangerous game that we’re trying to constrain.”

How Did We Get Here?

Not long ago, prediction markets, or futures exchanges, were, in the grand scheme, rather inconsequential to the general public.

Under the CFTC’s oversight of derivatives markets, exchanges primarily were used to trade commodities futures, options, and crypto derivatives. The Commission permitted select platforms the ability to offer election predictions under strict parameters.

In 2022, under President Joe Biden, the CFTC stripped PredictIt of the special exemption that allowed it to offer election contracts. In 2024, Kalshi won a lawsuit against the CFTC regarding betting on congressional elections, and the Commission softened its stance after President Donald Trump took office in early 2025. Since then, prediction platforms have exploded in popularity as they’ve expanded their offerings to include sports, entertainment, and geopolitical-focused contracts. 

The problem now, Reps. Moore and Carbajal argue, is that the CFTC is not required to prohibit contracts “contrary to the public interest.” 

From the press release announcing the introduction of Moore and Carbajal’s bill:

“Under current law, a designated contract market must self-certify that a contract or contract type complies with CFTC regulations before listing. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act clarified the CFTC’s authority to, at its own discretion, prohibit contracts involving terrorism, assassination, war, gaming, illegal activity (known as TAWGA, collectively), or other subject matter that the Commission may determine is contrary to the public interest. However, the CFTC is not required to enforce prohibitions against any event contract.”

Prohibited Contracts are ‘Clear Risks to Public Safety’

Allowing prohibited contracts presents a clear risk to public safety, national security, election integrity, insider trading, and service members, Reps. Carbajal and Moore concluded.

“Contracts based on illegal activity create perverse incentives for criminals to commit crimes to trigger payouts. Contracts related to government or military activity create an incentive for insiders to ‘bet on’ or leak sensitive information for profit. Election contracts create incentives to manipulate democratic processes. Contracts related to federal or state government functions create endless opportunities for insider trading on actions taken by elected officials, appointees, or other government personnel, in some cases exposing elected officials to safety risks.

Congress must require the CFTC to enforce against illicit contract types to mitigate these risks.”

If passed, the ECEA would do just that.

The Act is just the latest federal legislation targeting prediction markets, which are also the subject of at least six Congressional letters. 

Last week, Senators Jeff Merkley (D-OR) and Amy Klobuchar (D-MN) introduced the End Prediction Market Corruption Act, which would ban or limit the trading of event contracts by the president, vice president, Congress, and senior executive branch officials.

Finally, Rep. Gabe Vasquez (D-NM) proposed an amendment to the Farm, Food, and National Security Act of 2026, H.R. 7567.

Ultimately, it didn’t advance, despite support from Indian gaming associations. On March 7, Pechanga.net wrote that Vasquez’s proposed amendment to the CEA would have reaffirmed existing law and regulations. Specifically, it emphasized that derivative exchanges under the federal Commodity Exchange Act “cannot offer event contracts or swaps on sporting events or casino-style games.”

Act Earns Early Praise from Tribes, Lobbyists

The California Nations Indian Gaming Association (CNIGA) has commended Reps. Moore and Carbajal for introducing the ECEA. 

In a March 6 press release, CNIGA called the Act “critical federal legislation to address illegal sports betting conducted through so-called ‘prediction markets.’”

James Siva, CNIGA’s chairman, said:

“The expansion of sports gambling offerings on prediction market platforms is directly undermining clearly established tribal sovereignty and state authority over gambling within our borders. These sports event futures are nothing short of illegal betting operations. We commend Rep. Moore’s legislation, which takes the necessary steps to clarify the CFTC’s role and preserve our nationwide regulated gaming framework. We will continue to work with Congress to put an end to this regulatory loophole.”

Further, the newly formed anti-prediction market group, Gambling is Not Investing (GINI), praised the effort.

GINI’s executive director, Mick Mulvaney, applauded the congressmen for “confronting these risks head-on.”

Mulvaney, who held several high-profile roles in Trump’s first administration, said in a statement:

Today’s introduction of the Event Contract Enforcement Act is an important step toward reining in these pernicious prediction market operators that flout seriously debated and well-crafted state laws governing sports gambling.

“These so-called prediction markets are nothing more than a backdoor for unregulated gambling. They are unilaterally making online sports gambling widely available to anyone in the country without the consumer protections, age restrictions, and state and local tax benefits that govern legalized sports betting.

“These unsafe and unregulated sports gambling markets are bad for Americans.”