New Merkley, Raskin Legislation Bans Gambling on Elections, Sports, War, and Government Activity

Washington, D.C. - Today, Oregon's U.S. Senator Jeff Merkley and U.S. Representative Jamie Raskin (MD-08) introduced new legislation to crack down on prediction markets and the opportunity these markets invite for corruption.

Merkley and Raskin's STOP Corrupt Bets Act responds to the recent explosion of prediction markets, which now offer event contracts on everything from elections to sports and acts of war. The bicameral bill would ban betting through prediction markets on elections, government actions, sports, and military actions. These areas are not commodities and have little-to-no value in helping business investments.

"When anyone can use prediction markets to make a well-timed bet on Congress passing a bill, government decisions, or a military strike, it's ripe for corruption and erodes public trust," said Merkley. "The STOP Corrupt Bets Act restores the original intent of prediction markets and prevents these markets from further eroding our democratic institutions and turning them into a casino. I'm ready to work with my colleagues on both sides of the aisle to crack down on this bad bet for democracy and restore our vision of government 'of, by, and for the people,' not government 'of, by, and for the powerful.'"

"The oligarchs and opportunists are using prediction markets like Kalshi and Polymarket to enrich themselves. But democracy isn't about insider gambling on our common future, it's about everyone making it together. Placing bets on public policy and political events informed by insider knowledge spreads civic cynicism and distrust in our democratic institutions," said Raskin. "By banning bets on elections, legislation, acts of war and other government actions, we can oppose corrupt attempts to rig our democracy and profit from the fix."

Prior to 2024, event contracts on elections, sports, and government actions did not exist in the United States. A lawsuit brought by Wall Street firm Kalshi paved the way for election betting just months before that year's presidential election, and the 2026 midterm elections will be the first full election cycle that allows election gambling. This is happening at the same time as reports of individuals using prediction markets to place suspiciously timed bets and earn massive payouts following the fall of former Venezuelan President Nicolás Maduro, ouster of Ayatollah Ali Khamenei, and military actions against Iran.

The STOP Corrupt Bets Act would:

• Explicitly prohibit event contracts on:
  1. Elections and their outcome;
  2. Government actions across all branches unless there's a commercial hedging need;
  3. Sports, and;
  4. U.S. or foreign military actions.
• Clarifies that the intent of Congress in the original statute was that these markets are already against the intent of the Commodity Exchange Act, and that the Commodity Futures Trading Commission (CFTC) must enforce and prevent any market that doesn't have a commercial hedging value to prevent federal gambling.
• Requires the non-partisan, independent Government Accountability Office (GAO) to conduct a study on prediction markets, insider trading, preventing any other markets that are "gaming" or gambling, the impact on children, and ways Congress can rein in offshore illegal bets.

This legislation also returns the power of regulating gambling to the states by ensuring they can choose to allow gambling and regulate it under state jurisdiction or prohibit it. At least 20 federal suits have been filed against platforms offering prediction markets for their products that are akin to gambling, in direct violation of state law.

The STOP Corrupt Bets Act is cosponsored by U.S. Senators Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), and Sheldon Whitehouse (D-RI).

Merkley and Raskin's bill is supported by Public Citizen, Americans for Financial Reform (AFR), Citizens for Responsibility and Ethics in Washington (CREW), Project On Government Oversight (POGO), and Democracy Defenders Action.

"The prediction market industry has become nothing more than a gambling business by any other name. Recent bets on prediction market platforms on, say, the killing of a national leader or the price of oil that were placed moments before the federal government took actions causing those bets to become reality, suggests those bettors may have had insider information. The federal government should not be in the business of trying to run casinos. The 'STOP Corrupt Bets Act of 2026' by Sen. Merkley and Rep. Raskin would prevent prediction markets from operating as casinos and is heartily endorsed by Public Citizen," said Craig Holman, Ph.D., Public Citizen.

"Prediction markets have turned democracy itself into a casino by allowing gambling on American elections, government actions, or military intervention," said Patrick Woodall, managing director at Americans for Financial Reform. "Government officials should not be able to leverage their access to confidential information to game prediction markets and unfairly enrich themselves. The STOP Corrupt Bets Act prevents connected officials from getting rich by trading on inside information and restores some needed trust and confidence in the U.S. government."

"Prediction markets are increasingly packaging gambling as financial instruments, exploiting regulatory gray areas to avoid basic consumer protections. Senator Jeff Merkley and Representative Jamie Raskin's Stop Trading On Predictions and Corrupt Bets Act of 2026 draws a clear, necessary line: if it looks like gambling, it should be regulated as gambling," said Virginia Canter, Ethics and Anti-Corruption Chief Counsel and Director of Democracy Defenders Action. "By preventing CFTC-regulated entities from listing or clearing these contracts-except in the narrow case of legitimate commercial hedging-the STOP Corrupt Bets Act would protect markets from manipulation and conflicts of interest. It's a commonsense step to ensure our financial system serves real economic needs, not speculative betting on political outcomes or public crises."

"Recent high profile instances of bets on war, elections and other political actions underscore the need for better regulation of prediction markets," said Donald Sherman, President and CEO of Citizens for Responsibility and Ethics in Washington (CREW). "These types of event contracts present clear ethical concerns. The STOP Corrupt Bets Act clarifies and extends the law to the most dangerous types of bets in order to combat the risk of bad actors circumventing existing state and federal laws and attempting to manipulate government actions to their own advantage."

"Prediction market platforms must be clear and consistent on what event contracts are allowed and prohibited. Allowing bets on political events, government actions, and military matters undermines public trust and invites corruption. POGO is proud to endorse Sen. Merkley and Rep. Raskin's legislation as a crucial step toward meaningful oversight," said Janice Luong, Policy Associate, Project On Government Oversight.

Merkley has been a leader on Capitol Hill ringing the alarm bells about the dangers that prediction markets pose to our democracy. Previously, he urged the CFTC to reject a then-pending proposal from Kalshi to set up massive election casinos that could influence and interfere with American elections and further erode public trust in democracy. He also took to the floor of the U.S. Senate and penned an op-ed to warn about efforts to exploit American democracy for profit.

He recently introduced the End Prediction Market Corruption Act to prevent the President, Vice President, Members of Congress, and other public officials from trading event contracts, curbing the potential for insider trading and conflicts of interest. He has also been a long-time leader in the push to end public corruption, including leading a bipartisan bill that would prohibit lawmakers from trading stocks and legislation to ban cryptocurrency-related corruption by elected officials at the highest levels of the federal government.

Full text of the STOP Corrupt Bets Act can be found by clicking here.

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