Bill Summary
The proposed legislation, titled the "Prediction Market Restrictions on Insider Speculation and Knowledge-Trading Act" or the "Prediction Market RISK Act," aims to clarify and reaffirm the authority of the Commodity Futures Trading Commission (CFTC) to regulate and enforce rules against prohibited activities in prediction markets.
**Key Components:**
1. **Short Title**: The Act is officially referred to as the Prediction Market RISK Act.
2. **Definition**: It defines a "prediction market contract" as any financial instrument linked to the anticipated occurrence or non-occurrence of future events, including market-based event contracts, traded on platforms engaged in interstate commerce.
3. **CFTC Authority**: The legislation specifies that existing provisions of the Commodity Exchange Act concerning illegal trading practices also apply to prediction market contracts. This means the CFTC can enforce regulations to prevent insider trading and other forms of market manipulation within these markets.
Overall, the Act seeks to enhance regulatory oversight of prediction markets to ensure fair trading practices and prevent abuse through insider knowledge.
Possible Impacts
The "Prediction Market Restrictions on Insider Speculation and Knowledge-Trading Act" could affect people in the following ways:
1. **Increased Market Integrity**: By empowering the Commodity Futures Trading Commission (CFTC) to enforce regulations against prohibited activities in prediction markets, the bill seeks to create a fairer trading environment. This could benefit ordinary investors by reducing the incidence of insider trading and ensuring that market outcomes are determined based on genuine speculation rather than manipulative practices.
2. **Greater Confidence in Prediction Markets**: With clearer regulations and enforcement mechanisms in place, participants in prediction markets may feel more secure about the legitimacy of these platforms. This could encourage broader participation from both institutional and retail investors, potentially leading to more accurate forecasting of events and increased liquidity in these markets.
3. **Potential Limitations on Trading Strategies**: The enforcement of restrictions on insider speculation and knowledge-trading could limit certain trading strategies that rely on non-public information. Traders who engage in these practices may need to adjust their strategies, which could impact their profitability and the overall dynamics of trading in prediction markets. For some, this could result in fewer opportunities for profit, while for others, it might lead to a more stable and predictable trading environment.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8148 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 8148
To reaffirm the Commodity Futures Trading Commission's authority to
enforce prohibited activity on prediction markets.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 27, 2026
Mr. Moulton introduced the following bill; which was referred to the
Committee on Agriculture
_______________________________________________________________________
A BILL
To reaffirm the Commodity Futures Trading Commission's authority to
enforce prohibited activity on prediction markets.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prediction Market Restrictions on
Insider Speculation and Knowledge-Trading Act'' or the ``Prediction
Market RISK Act''.
SEC. 2. DEFINITION.
The term ``prediction market contract'' means any financial
instrument, contract, or derivative listed on or offered by a platform
engaged in interstate commerce and tied to the occurrence or non-
occurrence of a future event, including market-based event contracts.
SEC. 3. CFTC AUTHORITY TO ENFORCE PROHIBITED TRANSACTIONS OCCURRING IN
RELATION TO A PREDICTION MARKET CONTRACT.
Section 4(c) and section 6(c) of the Commodity Exchange Act (7
U.S.C. 7a-2(c)) apply to illegal trading practices occurring with
relation to a prediction market contract.
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