[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4060 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 4060
To provide national safeguards to prevent abuse and fraud in online
prediction markets, prevent underage use of online prediction markets,
protect consumers, and return regulatory authorities and oversight of
online prediction markets to States.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 11, 2026
Mr. Blumenthal (for himself and Mr. Kim) introduced the following bill;
which was read twice and referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To provide national safeguards to prevent abuse and fraud in online
prediction markets, prevent underage use of online prediction markets,
protect consumers, and return regulatory authorities and oversight of
online prediction markets to States.
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 Markets Security and
Integrity Act of 2026''.
SEC. 2. CONGRESSIONAL FINDINGS.
Congress finds that--
(1) online prediction markets offer services that are
substantially the same as betting, wagering, gambling, and
sports gambling;
(2) foreign online prediction markets have offered to
individuals in the United States unregulated gambling services
that violate Federal and State laws;
(3) State regulators have historically been understood to
regulate gambling as a matter of consumer protection and public
health;
(4) State regulators were never intended to be precluded
from enforcing State gambling laws against online prediction
markets; and
(5) in the absence of State regulations concerning online
prediction markets, several harms have resulted, including--
(A) fixing of wagers based on insider information
or manipulation of outcomes, such as proposition bets
in sports;
(B) the mishandling or misuse of sensitive
corporate and Government information, such as bets
placed on the downfall of Venezuelan President Nicolas
Maduro prior to his capture by the United States or
military action against Iran;
(C) harm to bettors' well-being as a result of
addictive features, such as bonus funds, and a lack of
safeguards, such as age restrictions; and
(D) the availability of gambling activities to
people as young as 18 years of age in violation of laws
of the various States.
SEC. 3. DEFINITIONS.
In this Act:
(1) Amateur athletic competition.--The term ``amateur
athletic competition'' has the meaning given the term in
section 220501 of title 36, United States Code.
(2) Anonymized wagering data.--With respect to a wager
accepted by an online prediction market, the term ``anonymized
wagering data'' means--
(A) a unique identifier for the transaction and, if
available, the individual who placed the wager, except
that such identifier shall not include any personally
identifiable information of the individual;
(B) the amount, topic, and type of wager;
(C) the date and time at which the wager was
accepted;
(D) the location at which the wager was placed,
including the internet protocol address, if applicable;
and
(E) the outcome of the wager.
(3) Gambling disorder.--The term ``gambling disorder''
means--
(A) gambling disorder, as the term is used by the
American Psychiatric Association in the publication
entitled ``Diagnostic and Statistical Manual of Mental
Disorders, 5th Edition'' (or a successor edition);
(B) pathological gambling;
(C) gambling addiction; and
(D) compulsive gambling.
(4) Governmental entity.--The term ``governmental entity''
means--
(A) a State;
(B) a political subdivision of a State; and
(C) an entity or organization, including an Indian
Tribe, that has governmental authority within the
territorial boundaries of the United States, including
Indian lands.
(5) Indian lands.--The term ``Indian lands'' has the
meaning given the term in section 4 of the Indian Gaming
Regulatory Act (25 U.S.C. 2703).
(6) Indian tribe.--The term ``Indian Tribe'' has the
meaning given the term ``Indian tribe'' in section 4 of the
Indian Gaming Regulatory Act (25 U.S.C. 2703).
(7) Interstate wagering compact.--The term ``interstate
wagering compact'' means a compact to offer wagering in
accordance with this Act between--
(A) 2 or more States with a State wagering program;
(B) 1 or more States with a State wagering program
and 1 or more Indian Tribes; or
(C) 2 or more Indian Tribes.
(8) Listing.--The term ``listing'' means the listing on an
online prediction market of an event that may be the subject of
a wager.
(9) Microbet.--The term ``microbet'' means a wager placed
on an outcome or occurrence within an event that may or may not
be related to the ultimate result of the event.
(10) National self-exclusion list.--The term ``national
self-exclusion list'' means the list maintained under section
554 of the Public Health Service Act, as added by section 8 of
this Act, in cooperation with State regulatory entities, under
section 7(b)(6)(A)(ii) of this Act.
(11) Official.--The term ``official'' means a referee,
umpire, judge, reviewer, or any other individual authorized to
administer the rules of a sporting event.
(12) Online prediction market.--The term ``online
prediction market'' means an online platform that allows
agreements, contracts, transactions, or swaps between users
over the outcome of non-financial events, such as sports and
elections.
(13) Proposition bet.--The term ``proposition bet'' means a
side wager on a part of an event that does not concern the
final outcome of the event.
(14) Reasonable lender standard.--The term ``reasonable
lender standard'' means application of underwriting criteria
that would be applied by a lender that is an insured depository
institution (as defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) for an unsecured loan extended
to a consumer.
(15) Sporting event.--The term ``sporting event'' means any
athletic competition.
(16) Sports organization.--The term ``sports organization''
means--
(A) a person or governmental entity that--
(i) sponsors, organizes, schedules, or
conducts a sporting event; and
(ii) with respect to the sporting event and
the participants in the sporting event--
(I) prescribes final rules; and
(II) enforces a code of conduct;
and
(B) a league or association of 1 or more persons or
governmental entities described in subparagraph (A).
(17) State.--The term ``State'' means--
(A) a State;
(B) the District of Columbia; and
(C) any commonwealth, territory, or possession of
the United States.
(18) State regulatory entity.--The term ``State regulatory
entity'' means the governmental entity--
(A) established or designated by a wagering opt-in
State under section 6(a)(2)(A)(ii); and
(B) responsible, solely or in coordination with 1
or more other governmental entities, for the regulation
of wagering in the applicable wagering opt-in State.
(19) State wagering program.--The term ``State wagering
program'' means a program administered and overseen by a State
pursuant to an application approved by the Attorney General
under subsection (b) or (e) of section 6.
(20) Suspicious transaction.--The term ``suspicious
transaction'' means a transaction or an arrangement that an
operator of an online prediction market knows or has reason to
know, as determined by a director, officer, employee, or agent
of the online prediction market, is or would be if completed--
(A) a violation of, or part of a plan to violate or
evade, any Federal, State, or local law (including any
regulation); or
(B) wagering by or on behalf of an individual
described in subparagraph (C), (D), or (E) of section
7(b)(4).
(21) Suspicious transaction report.--The term ``suspicious
transaction report'' means a report submitted to a State
regulatory entity or a sports organization under section
7(b)(13).
(22) Wager.--
(A) In general.--Except as provided in subparagraph
(C), the term ``wager'' means the staking or risking by
any person of something of value upon the outcome of an
event, including the outcome of any portion or aspect
thereof, upon an agreement or understanding that the
person or another person will receive something of
value in the event of a certain outcome.
(B) Inclusion.--With respect to an event, the term
``wager'' includes--
(i) a straight bet;
(ii) a teaser;
(iii) a variation of a teaser;
(iv) a parlay;
(v) a total or over-under;
(vi) a moneyline;
(vii) a betting pool;
(viii) exchange wagering;
(ix) in-game wagering, including in-game
wagering on--
(I) a final or interim game score;
(II) statistics; or
(III) a discrete in-game event;
(x) a sports lottery; and
(xi) a proposition bet.
(C) Exceptions.--The term ``wager'' does not
include--
(i) any activity excluded from the
definition of the term ``bet or wager'' under
section 5362 of title 31, United States Code;
or
(ii) any activity that does not violate a
provision of the Interstate Horseracing Act of
1978 (15 U.S.C. 3001 et seq.).
(23) Wagering.--The term ``wagering'' means the acceptance
of a wager by an online prediction market.
(24) Wagering opt-in state.--The term ``wagering opt-in
State'' means a State that administers a State wagering
program.
SEC. 4. PROTECTING CONSUMERS FROM FRAUD AND MANIPULATION.
(a) Prevention of Insider Trading and Conflicts of Interest.--An
individual or operator of an online prediction market shall not--
(1) use material, nonpublic information for private gain in
wagering on an online prediction market; or
(2) create or participate in listings or wagers on an
online prediction market that would present a conflict of
interest.
(b) Prevention of Manipulation.--An individual or operator of an
online prediction market shall not engage in manipulation and deceptive
practices that predetermine the outcome or otherwise materially
interfere with the integrity and execution of listings on an online
prediction market.
(c) Restricting Fraudulent Listings.--An operator of an online
prediction market shall not offer listings that--
(1) are susceptible to manipulation or fraudulent
activities;
(2) relate to war, military action, or death;
(3) violate State or Federal law; or
(4) relate to other matters that are contrary to the public
interest as determined by the Attorney General and established
under the rules issued pursuant to subsection (e).
(d) Ensuring Clear Resolution of Wagers.--Each operator of an
online prediction market shall--
(1) ensure all listings clearly and conspicuously state the
conditions under which the resolution of any wager will be
decided;
(2) be responsible for determining when a listing has been
resolved; and
(3) promptly remove listings that violate the provisions of
this section.
(e) Required Rules of Online Prediction Markets.--Each operator of
an online prediction market shall--
(1) develop and publish rules for use of the online
prediction market that prohibit any use of the online
prediction market--
(A) in violation of subsections (a) and (b); or
(B) that would otherwise constitute a prohibited
transaction described in section 4c of the Commodity
Exchange Act (7 U.S.C. 6c); and
(2) enforce the rules developed under paragraph (1) of this
subsection with respect to the users of the online prediction
market.
(f) Rulemaking.--Not later than 180 days after the date of
enactment of this Act, the Attorney General shall issue rules to
implement the provisions of this section, including defining the term
``material, nonpublic information'' for purposes of subsection (a)(1).
SEC. 5. CONSUMER SAFEGUARDS AND STOPPING PREDATORY TACTICS.
An online prediction market may not operate in a State unless
expressly authorized under a State wagering program that has been
approved by the Attorney General under section 6(b)(1).
SEC. 6. STATE WAGERING PROGRAM.
(a) Initial Application.--
(1) In general.--To request approval to administer a State
wagering program, a State shall submit an application to the
Attorney General at such time, in such manner, and accompanied
by such information as the Attorney General may require.
(2) Contents.--An application under paragraph (1) shall
include--
(A) a full and complete description of the State
wagering program the State proposes to administer under
State law, including--
(i) each applicable State law relating to
wagering; and
(ii) an identification of the State
regulatory entity; and
(B) an assurance from the attorney general or chief
legal officer of the State that the laws of the State
provide adequate authority to carry out the proposed
State wagering program.
(b) Approval by Attorney General.--
(1) In general.--Not later than 180 days after the date on
which the Attorney General receives a complete application
under this section, the Attorney General shall approve the
application unless the Attorney General determines that the
proposed State wagering program does not meet the standards set
forth in section 7.
(2) Denial of application.--A decision of the Attorney
General to deny an application submitted under this section
shall--
(A) be made in writing; and
(B) specify the 1 or more standards under section 7
that are not satisfied by the proposed State wagering
program.
(c) Notice of Material Changes.--In the case of a material change
to a State law relating to wagering, the State regulatory entity, or
other information included in an application submitted pursuant to
subsection (a) or (e), not later than 30 days after the date on which
the change is made, the State shall submit to the Attorney General a
notice of such change.
(d) Duration.--A State wagering program shall be valid for a fixed
3-year period beginning on the date on which the Attorney General
approves the application of the applicable State under subsection (a)
or (e).
(e) Renewal Application and Approval.--Not later than the date on
which the 3-year period referred to in subsection (d) ends, a State
seeking to renew the approval of the State wagering program may submit
to the Attorney General a renewal application that--
(1) includes the information described in subsection (a);
and
(2) shall be subject to the approval process under
subsection (b).
(f) Revocation and Review.--
(1) Emergency revocation of approval.--The Attorney General
shall promulgate regulations that provide procedures by which
the Attorney General may revoke the approval of a State to
administer a State wagering program before the date on which
the 3-year term described in subsection (d) expires if the
Attorney General finds that the wagering program does not meet
1 or more standards set forth in section 7.
(2) Administrative review.--The Attorney General shall
promulgate regulations that provide procedures by which a State
may seek administrative review of any decision by the Attorney
General--
(A) to deny an application under subsection (b)(2);
(B) to deny a renewal application under subsection
(e); or
(C) to revoke an approval under paragraph (1) of
this subsection.
SEC. 7. STATE WAGERING PROGRAM STANDARDS.
(a) In General.--The Attorney General shall approve an application
under section 6 unless the Attorney General determines that the
proposed State wagering program does not meet the standards set forth
in subsection (b) of this section.
(b) Standards for State Wagering Programs.--A State wagering
program shall meet each of the following standards:
(1) State regulatory entity.--Establish or designate a
public entity in the applicable State as the State regulatory
entity for the purposes of regulating online prediction markets
and enforcing wagering laws in the State.
(2) Permissible wagering.--
(A) Online prediction market wagering.--
(i) In general.--With respect to any
authorization of wagering on an online
prediction market, provide that such wagering,
as available, is available only to--
(I) individuals located in the
State; or
(II) in the case of an interstate
wagering compact approved by the
Attorney General, individuals located
in States and on Indian lands of Indian
Tribes that are party to the compact.
(ii) Location verification.--Include
location verification requirements reasonably
designed to prevent an individual from placing
a wager on an online prediction market from a
location other than a location described in
clause (i).
(B) Wager approval.--
(i) In general.--Provide that an operator
of an online prediction market shall not accept
a wager unless such wager or class of wagers is
expressly approved by the State regulatory
entity.
(ii) Approval criteria.--Direct the State
regulatory entity to establish criteria for
decisions with respect to the approval of a
wager or a class of wagers, such as whether the
outcome of the event or contingency on which
the wager is placed is--
(I) verifiable;
(II) generated by a reliable and
independent process; and
(III) unlikely to be affected by
any wager placed.
(C) Prohibition on amateur or intercollegiate
proposition bets.--Prohibit the State regulatory entity
from approving, or an operator of an online prediction
market from accepting, a proposition bet on--
(i) any amateur athletic competition; or
(ii) any intercollegiate sport (as defined
in section 2 of the Sports Agent Responsibility
and Trust Act (15 U.S.C. 7801)).
(D) Prohibition of wagering on sporting events that
have commenced.--Prohibit the State regulatory entity
from approving, or an operator of an online prediction
market from accepting, a wager on any sporting event
once such event has commenced.
(E) Prohibition on reload bonuses.--Prohibit the
State regulatory entity from approving, or an operator
of an online prediction market from encouraging,
customers to make deposits by offering financial
incentives, including bonus funds or gambling credits
when the account of a customer approaches or reaches a
zero balance.
(F) Prohibition on tier programs.--Prohibit the
State regulatory entity from approving, or an operator
of an online prediction market from providing, anything
of value that is greater than $5 as a form of reward or
incentive linked to the level, amount, frequency,
scope, pace, duration, or rate or gambling activity of
a customer.
(G) Prohibition on vip programs.--Prohibit the
State regulatory entity from approving, or an operator
of an online prediction market from providing--
(i) compensation in any form that is
directly or indirectly connected to the
deposits, gambling activity, gambling wins,
gambling losses, or the level, amount,
frequency, scope, pace, duration, or rate of
gambling activity of a customer; or
(ii) cash, gambling credit, prizes, gifts,
merchandise, event tickets or passes, or
property (real or personal) connected to the
deposits, gambling activity, gambling wins,
gambling losses, or level, amount, frequency,
scope, pace, duration, or rate of gambling
activity of a customer.
(3) Restrictions on wagering to protect contest
integrity.--
(A) Definition of necessary to maintain contest
integrity.--In this paragraph, the term ``necessary to
maintain contest integrity'' means that, in the absence
of a restriction, there is a reasonably foreseeable
risk that the outcome of the event or contingency on
which the wager is placed would be affected by the
wager.
(B) Contest integrity.--Prohibit an online
prediction market from accepting a wager in violation
of a notice of restriction received by the online
prediction market under subparagraph (E)(i).
(C) Request to restrict wagering.--
(i) In general.--With respect to an event
sponsored, organized, or conducted by any
person, permit the person to submit to the
State regulatory entity a request to restrict,
limit, or exclude wagers on 1 or more events if
the applicable person determines that such
restriction is necessary to maintain contest
integrity.
(ii) Deadlines for submission.--Provide
that the State regulatory entity shall
establish reasonable deadlines for the
submission of a request under clause (i) in
advance of the applicable event.
(D) Determination by the state regulatory entity.--
Provide that the State regulatory entity shall
promptly--
(i) approve a request described in
subparagraph (C)(i) unless the State regulatory
entity determines, considering any information
provided by the person that submitted the
request and any other relevant information,
that a restriction is not necessary to maintain
contest integrity;
(ii) provide a written explanation of a
determination under clause (i) to approve or
deny a request;
(iii) make such written explanation
available to the public; and
(iv) provide a process by which the person
that submitted the request may seek review of
such determination.
(E) Notice of restriction.--Provide that the State
regulatory entity shall establish a process to--
(i) provide to operators of online
prediction markets prompt notice of any
restriction approved by the State regulatory
entity; and
(ii) make such notice publicly available.
(4) Prevention of wagering by prohibited individuals.--
Prohibit an online prediction market from accepting wagers from
any--
(A) individual younger than 21 years of age;
(B) individual on the national self-exclusion list;
(C) athlete, coach, official, or employee of a
sports organization or any club or team of a sports
organization, with respect to a sporting event
sponsored, organized, or conducted by the sports
organization;
(D) employee of a player or an official union of a
sports organization, with respect to a sporting event
sponsored, organized, or conducted by the sports
organization;
(E) individual who, with respect to a sporting
event sponsored, organized, or conducted by a sports
organization, is--
(i) credentialed or accredited by the
sports organization; and
(ii) prohibited from placing a wager by the
terms of such credential or accreditation; or
(F) individual convicted of an offense under
subsection (a) of section 224 of title 18, United
States Code.
(5) Authorized data.--
(A) Result of a wager.--Provide that an operator of
an online prediction market shall determine the result
of a wager only with data that is obtained from a
source that the State regulatory entity has--
(i) found to provide--
(I) substantial speed, accuracy,
and consistency; and
(II) only data that is--
(aa) legally obtained; and
(bb) in full compliance
with the terms of any
applicable contract or license;
(ii) expressly authorized to provide such
data to online prediction markets; and
(iii) identified in the application of the
State regulatory entity under section 6.
(B) Other purposes.--Provide that the statistics,
result, outcome, or other data used by an operator of
an online prediction market for a purpose other than to
determine the result of a wager shall be in the public
domain or otherwise legally obtained.
(6) Consumer protections.--
(A) Self-exclusion.--
(i) State self-exclusion list.--Provide a
process by which an individual may restrict
himself or herself from placing a wager with an
operator of an online prediction market located
in the State, including by imposing wager
limits.
(ii) National self-exclusion list.--
Provide, through the State regulatory entity
acting in cooperation with the Assistant
Secretary for Mental Health and Substance Use,
a process by which an individual may restrict
himself or herself from placing a wager with an
operator of an online prediction market located
in any wagering opt-in State, including by
imposing wager limits and placing himself or
herself on the national self-exclusion list.
(iii) Reasonable steps required.--Provide
that an operator of an online prediction market
may not accept a wager by an individual who
is--
(I) described in clause (i); or
(II) included on the national self-
exclusion list.
(B) Withdrawal restrictions.--Prohibit an operator
of an online prediction market from--
(i) requiring an individual engaged in
wagering to participate in a publicity or an
advertising activity of the online prediction
market as a condition of withdrawal of the
winnings of the individual; and
(ii) imposing on any individual engaged in
wagering--
(I) a minimum or maximum withdrawal
limit for the account of the
individual;
(II) any restriction on the right
of the individual to make a withdrawal
from the account of the individual
based on the extent of the wagering by
the individual;
(III) an unreasonable deadline for
the provision of information relating
to the identity of the individual as a
condition of withdrawal from the
account of the individual; or
(IV) a dormancy charge for an
account of the individual that is not
used to place a wager.
(C) Disclosure.--
(i) Restrictions or conditions.--Provide
that an operator of an online prediction market
shall provide an individual with adequate and
clear information relating to any applicable
restriction or condition before the individual
opens an account with the online prediction
market.
(ii) Bonuses offered.--Provide that an
operator of an online prediction market shall
provide to an individual engaged in wagering
clear, concise, and unambiguous information
relating to any bonus offered, including--
(I) the terms and conditions for
awarding, receiving, or withdrawal of
the bonus; and
(II) a description of any and all
wagering requirements.
(iii) Public availability.--Provide that
the information described in clauses (i) and
(ii) be available to the public.
(iv) Actual odds.--Provide that an operator
of an online prediction market shall--
(I) before accepting a wager,
provide an individual with adequate and
clear information on the actual odds of
winning a wager, as calculated by the
operator of the online prediction
market; and
(II) provide an individual placing
a wager with an opportunity to cancel
the wager without any cost or penalty,
and provide information to the
individual regarding such opportunity.
(D) Treatment and education funding.--Provide that
an operator of an online prediction market shall
allocate an appropriate percentage of the revenue from
wagering to--
(i) treatment for gambling disorder; and
(ii) education on responsible gaming.
(E) Reserve requirement.--Provide that an operator
of an online prediction market shall maintain a reserve
in an amount not less than the sum of--
(i) the amounts held by the operator of the
online prediction market for the account of
patrons;
(ii) the amounts accepted by the operator
of the online prediction market as wagers on
contingencies the outcomes of which have not
been determined; and
(iii) the amounts owed but unpaid by the
operator of the online prediction market on
winning wagers during the period for honoring
winning wagers established by State law or the
operator of the online prediction market.
(F) Affordability protections.--Provide that an
operator of an online prediction market--
(i) may not accept more than 5 deposits
from an individual during a 24-hour period;
(ii) may not accept deposits made using a
credit card; and
(iii) shall be required, before accepting
wagers from an individual in an amount that is
more than $1,000 during a 24-hour period or
$10,000 during a 30-day period, to conduct an
affordability check which shall be satisfied by
1 or both of the following ways:
(I) Verification that the proposed
deposit is not greater than 30 percent
of the monthly income of the
individual.
(II) Verification through a
reasonable lender standard based on
issuance of an unsecured loan for the
proposed deposit through methods
normally used by consumer lenders.
(G) Artificial intelligence restriction.--Provide
that an operator of an online prediction market may not
use artificial intelligence to--
(i) track the wagers of an individual;
(ii) create an offer or promotion targeting
a specific individual; or
(iii) create a gambling product, such as a
proposition bet or a microbet.
(7) Advertising.--Provide that advertisements for an online
prediction market--
(A) shall--
(i) disclose the identity of the online
prediction market; and
(ii) provide information about how to
access resources relating to gambling
addiction;
(B) shall not recklessly or purposefully target--
(i) problem gamblers;
(ii) individuals suffering from gambling
disorder or individuals who have placed
themselves on a self-exclusion list; or
(iii) individuals who are ineligible to
place a wager, including individuals younger
than 21 years of age (including through the
placement of advertisements in locations where
underage users are most prominent);
(C) may not be broadcast--
(i) between the hours of 8:00 a.m. and
10:00 p.m. local time; or
(ii) during a live broadcast of a sporting
event; and
(D) may not include--
(i) odds boosts or similar offers,
including advertising that contains the phrase
``bonus'', ``no sweat'', ``bonus bet'', or any
other similar term; or
(ii) any information on how to place a
wager or how wagers work.
(8) Licensing requirement.--
(A) In general.--Provide that an operator of an
online prediction market located in the State shall be
licensed by the State regulatory entity.
(B) Suitability for licensing.--
(i) In general.--Provide that before
granting a license to an online prediction
market, the State regulatory entity shall make
a determination, based on a completed
background check and investigation, with
respect to whether the prospective online
prediction market and any person considered to
be in control of the prospective online
prediction market is suitable for license in
accordance with suitability standards
established by the State regulatory entity.
(ii) Associates of applicants.--Provide
that if a prospective online prediction market
is a corporation, partnership, or other
business entity, a background check and
investigation shall occur with respect to--
(I) the president or other chief
executive of the corporation,
partnership, or other business entity;
and
(II) any other partner or senior
executive and director of the
corporation, partnership, or other
business entity, as determined by the
State regulatory entity.
(iii) Background check and investigation.--
Establish standards and procedures for
conducting the background checks and
investigations described in this subparagraph.
(C) Unsuitability for licensing.--With respect to
the suitability standards under subparagraph (B)(i),
provide that a prospective online prediction market
shall not be determined to be suitable for licensing as
an online prediction market if the operator of the
prospective online prediction market--
(i) has failed to provide information and
documentary material for a determination of
suitability for licensing as an online
prediction market;
(ii) has supplied information which is
untrue or misleading as to a material fact
pertaining to any such determination;
(iii) has been convicted of an offense
punishable by imprisonment of more than 1 year;
(iv) is delinquent in--
(I) filing any applicable Federal
or State tax returns; or
(II) the payment of any taxes,
penalties, additions to tax, or
interest owed to the United States or a
State;
(v) on or after October 13, 2006--
(I) has knowingly participated in,
or should have known the operator of
the prospective online prediction
market was participating in, an illegal
internet gambling activity, including--
(aa) taking an illegal
internet wager;
(bb) payment of winnings on
an illegal internet wager;
(cc) promotion through
advertising of an illegal
internet gambling website or
service; or
(dd) collection of any
payment on behalf of an entity
operating an illegal internet
gambling website; or
(II) has knowingly been owned,
operated, managed, or employed by, or
should have known the prospective
online prediction market was owned,
operated, managed, or employed by, any
person who was knowingly participating
in, or should have known the person was
participating in, an illegal internet
gambling activity, including an
activity described in items (aa)
through (dd) of subclause (I);
(vi) has--
(I) received any assistance,
financial or otherwise, from a person
who has, before the date of enactment
of this Act, knowingly accepted wagers
from any other person who is physically
present in the United States in
violation of Federal or State law; or
(II) provided any assistance,
financial or otherwise, to a person who
has, before the date of enactment of
this Act, knowingly accepted wagers
from any other person who is physically
present in the United States in
violation of Federal or State law;
(vii) with respect to any other entity that
has accepted a wager from any individual in
violation of United States law, has purchased
or otherwise obtained--
(I) such entity;
(II) a list of the customers of
such entity; or
(III) any other part of the
equipment or operations of such entity;
(viii) fails to certify in writing, under
penalty of perjury, that the applicant or other
such person, and all affiliated business
entities (including all entities under common
control), during the entire history of such
applicant or other such person and all
affiliated business entities--
(I) have not committed an
intentional felony violation of Federal
or State wagering law; and
(II) have used diligence to prevent
any United States person from placing a
wager on an internet site in violation
of Federal or State wagering laws; or
(ix) operates an online prediction market
or other wagering service outside the United
States that has failed to prevent any United
States person from placing a wager that does
not comply with Federal or State wagering laws.
(D) Revocation and suspension.--Establish standards
and procedures for suspending or revoking the license
of an operator of an online prediction market.
(9) Employee background checks.--Provide that an operator
of an online prediction market--
(A) shall ensure that each existing and newly hired
employee or contractor of the online prediction market
undergo an annual criminal history background check;
and
(B) shall not employ or enter into a contract with
any individual who has been convicted of a Federal or
State crime relating to wagering.
(10) Recordkeeping requirements.--
(A) In general.--With respect to each wager
accepted by an operator of an online prediction market
or attempted to be placed by an individual with an
operator of an online prediction market, provide that
the operator of the online prediction market shall
secure and maintain a record of the following:
(i) The name, permanent address, date of
birth, and social security number or passport
number of the individual who placed, or
attempted to place, the wager, which the
operator of the online prediction market shall
verify in accordance with the requirements for
verification of identity in parts 1010.312 and
1021.312 of title 31, Code of Federal
Regulations (or any successor regulation).
(ii) The amount and type of the wager.
(iii) The date and time at which the wager
was placed or attempted to be placed.
(iv) The location at which the wager was
placed or attempted to be placed, including the
internet protocol address, if applicable.
(v) The outcome of the wager.
(B) Records relating to suspicious transactions.--
Provide that, in addition to the records required to be
maintained pursuant paragraph (A), an operator of an
online prediction market shall be required to maintain
any other records relating to a suspicious transaction,
including video recordings, in the possession, custody,
or control of the operator of the online prediction
market.
(C) Duration of recordkeeping obligation.--Provide
that an operator of an online prediction market shall
be required to maintain each record required under this
paragraph for not fewer than 6 years after the date on
which the record is created.
(11) Data security.--Provide that an operator of an online
prediction market and the State regulatory entity shall take
reasonable steps to prevent unauthorized access to, or
dissemination of, wagering and customer data.
(12) Real-time information sharing.--Provide that an
operator of an online prediction market shall provide to the
State regulatory entity and the Attorney General anonymized
wagering data in real-time or as soon as practicable, but not
later than 24 hours, after the time at which a wager is
accepted by the operator of the online prediction market.
(13) Suspicious transaction reporting.--
(A) Reporting to state regulatory entity.--Provide
that each operator of an online prediction market
located in the State shall promptly report the
information described in paragraph (10)(A) for any
suspicious transaction to the State regulatory entity,
in such manner and accompanied by such additional
information as the State regulatory entity may require.
(B) Reporting to sports organizations.--
(i) In general.--Subject to clause (ii),
provide that an operator of an online
prediction market shall simultaneously transmit
to any applicable sports organization, and any
component of the Department of Justice or other
Federal law enforcement entity designated by
the Attorney General to receive such reports,
any suspicious transaction report submitted to
a State regulatory entity under subparagraph
(A).
(ii) Personally identifiable information.--
(I) In general.--Except as provided
in subclause (II), a suspicious
transaction report submitted to a
sports organization shall not contain
any personally identifiable information
relating to any individual who placed,
or attempted to place, a wager.
(II) Exception.--A suspicious
transaction report submitted to a
sports organization shall include any
available personally identifiable
information relating to an individual
described in subparagraph (C), (D), or
(E) of paragraph (4).
(14) Monitoring and enforcement.--
(A) In general.--Provide that the State regulatory
entity, in consultation with law enforcement, shall
develop and implement a strategy to enforce the
wagering laws of the State.
(B) Authority to monitor and enforcement.--Provide
adequate authority to the State regulatory entity and
law enforcement, as appropriate, to monitor compliance
with and enforce the wagering laws of the State,
including--
(i) the authority and responsibility to
conduct periodic audits and inspect the books
and records of each online prediction market
located or operating in the State; and
(ii) a requirement that the State
regulatory entity shall refer evidence of
potential criminal violations to the
appropriate law enforcement entity.
(15) Cooperation with investigations.--
(A) Online prediction markets.--Provide that any
operator of an online prediction market located or
operating in the State shall cooperate with any lawful
investigation conducted by--
(i) the State regulatory entity;
(ii) Federal or State law enforcement; or
(iii) a sports organization, with respect
to a wager--
(I) on a sporting event sponsored,
organized, or conducted by the sports
organization;
(II) placed by or on behalf of an
individual described in subparagraph
(C), (D), or (E) of paragraph (4); and
(III) accepted by the operator of
the online prediction market.
(B) State regulatory entity.--Provide that the
State regulatory entity shall cooperate with any lawful
investigation conducted by--
(i) Federal or State law enforcement; or
(ii) a sports organization, with respect to
a wager--
(I) on a sporting event sponsored,
organized, or conducted by the sports
organization; and
(II) accepted by an online
prediction market located or operating
in the State.
(16) Internal controls.--
(A) In general.--Provide that each operator of an
online prediction market shall devise and maintain a
system of internal controls sufficient to provide
reasonable assurances that wagers are accepted in
accordance with all applicable laws, regulations, and
policies.
(B) Minimum standards.--Provide that the State
regulatory entity shall adopt and publish minimum
standards for internal control procedures.
(C) Report.--Provide that each operator of an
online prediction market shall submit to the State
regulatory entity not less frequently than annually the
written system of internal controls of the online
prediction market.
(D) Audit.--Provide that system of internal
controls of an online prediction market shall be
evaluated on a periodic basis, but not less frequently
than every 3 years, by the State regulatory entity or
an independent third-party auditor.
SEC. 8. NATIONAL SELF-EXCLUSION LIST.
Part D of title V of the Public Health Service Act (42 U.S.C. 290dd
et seq.) is amended by adding at the end the following:
``SEC. 554. NATIONAL SELF-EXCLUSION LIST.
``(a) In General.--In cooperation with State regulatory entities,
the Secretary shall maintain and administer--
``(1) a list (to be known as the `national self-exclusion
list') of individuals who, by placing themselves on the list,
restrict themselves from placing a wager with an operator of an
online prediction market located in any wagering opt-in State,
including by imposing wager limits; and
``(2) a process by which an individual may add or remove
himself or herself from the national self-exclusion list.
``(b) Definitions.--In this section, the terms `online prediction
market', `wager', and `wagering opt-in State' have the meanings given
to such terms in section 3 of the Prediction Markets Security and
Integrity Act of 2026.''.
SEC. 9. PREVENTING MINORS FROM GAMBLING AND ENSURING COMPLIANCE.
(a) Prohibition.--An operator of an online prediction market may
not allow any individual younger than 21 years of age to register to
use the online prediction market or engage in any wager using the
online prediction market.
(b) Age, Identity, and Location Verification.--Each operator of an
online prediction market shall--
(1) establish and maintain a program to identify the full
name and location and establish the age of each user of the
online prediction market;
(2) ensure that--
(A) each new account on the online prediction
market is verified under the program established under
paragraph (1); and
(B) each existing account on the online prediction
market may not be used until verified under the program
established under paragraph (1);
(3) ensure that individuals who attempt to register for an
online prediction market are not otherwise restricted from
placing wagers, such as due to economic sanctions, self-
exclusion lists, or conflict of interest rules promulgated by
the Department of Justice; and
(4) ensure that, in the event that a user of the online
prediction market changes locations to a different State, the
operator of the online prediction market complies with the
regulations of the State the user is located in.
(c) Ban on Advertising to Individuals Younger Than 21 Years of
Age.--An operator of an online prediction market may not--
(1) advertise to any individual younger than 21 years of
age;
(2) use branding that would target any individual younger
than 21 years of age; or
(3) place ads in online or physical locations where the
majority of viewers or participants would be presumed to be
younger than 21 years of age.
SEC. 10. ENFORCEMENT.
(a) Powers of the Attorney General.--
(1) Civil action.--The Attorney General may bring a civil
action for injunctive relief in an appropriate district court
of the United States against any person who violates this Act
or any regulation promulgated under this Act.
(2) Criminal penalty.--Any person who violates this Act or
any regulation promulgated under this Act shall be fined not
less than $50,000 per violation, imprisoned for not more than 2
years, or both.
(3) Authority preserved.--Nothing in this section shall be
construed to limit the authority of the Attorney General under
any other provision of law.
(b) Enforcement by State Attorneys General.--
(1) Civil action.--In any case in which an attorney general
of a State has reason to believe that an interest of the
residents of that State has been or is threatened or adversely
affected by the violation of this Act or any regulation
promulgated under this Act by any operator of an online
prediction market, the attorney general of the State may, as
parens patriae, bring a civil action on behalf of the residents
of the State in an appropriate district court of the United
States to enjoin such violation.
(2) Rights of the attorney general.--
(A) Notice to attorney general.--
(i) In general.--Except as provided in
clause (iii), the attorney general of a State
shall notify the Attorney General in writing
that the attorney general of the State intends
to bring a civil action under paragraph (1) not
later than 10 days before initiating the civil
action.
(ii) Contents.--The notification required
under clause (i) with respect to a civil action
shall include a copy of the complaint to be
filed to initiate the civil action.
(iii) Exception.--If it is not feasible for
the attorney general of a State to provide the
notification required by clause (i) before
initiating an action under paragraph (1), the
attorney general of the State shall notify the
Attorney General immediately upon instituting
the civil action.
(B) Intervention by the attorney general.--The
Attorney General may--
(i) intervene in any action brought by the
attorney general of a State under paragraph
(1); and
(ii) upon intervening under clause (i), be
heard on all matters arising in the civil
action and file petitions for appeal of a
decision in the action.
(c) Limitation on State Action While Federal Action Is Pending.--If
the Attorney General institutes an action under subsection (a) with
respect to a violation of this Act or any regulation promulgated under
this Act, a State may not, during the pendency of that action,
institute an action under subsection (b) against any defendant named in
the complaint in the action instituted by the Attorney General based on
the same set of facts giving rise to the violation with respect to
which the Attorney General instituted the action.
SEC. 11. PRESERVING STATE REGULATIONS AND CONSUMER PROTECTIONS.
(a) Prohibition Relating to Event Contracts Under the Commodity
Exchange Act.--Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2)
is amended by inserting after subsection (c) the following:
``(d) Prohibition on Online Prediction Markets Listing Event
Contracts.--An agreement, contract, transaction, or swap in an excluded
commodity that is based upon an occurrence, extent of an occurrence, or
contingency shall not be listed or made available for clearing or
trading on or through an online prediction market (as defined in
section 3 of the Prediction Markets Security and Integrity Act of
2026).''.
(b) No Preemption.--Nothing in this Act preempts or limits the
authority of a State or an Indian Tribe to enact, adopt, promulgate, or
enforce any law, rule, regulation, or other measure with respect to
online prediction markets that is in addition to, or more stringent
than, the requirements of this Act, including a law, rule, regulation,
or other measure that prohibits an online prediction market from
operating in the State or Tribal jurisdiction.
SEC. 12. SEVERABILITY.
If a provision of this Act, an amendment made by this Act, a
regulation promulgated under this Act or under an amendment made by
this Act, or the application of any such provision, amendment, or
regulation to any person or circumstance, is held to be invalid, the
remaining provisions of this Act, amendments made by this Act,
regulations promulgated under this Act or under an amendment made by
this Act, or the application of such provisions, amendments, and
regulations to any person or circumstance--
(1) shall not be affected by the invalidity; and
(2) shall continue to be enforced to the maximum extent
practicable.
<all>
Prediction Markets Security and Integrity Act of 2026
#4060 | S Congress #119
Policy Area: Health
Subjects:
Last Action: Read twice and referred to the Committee on the Judiciary. (3/11/2026)
Bill Text Source: Congress.gov
Summary and Impacts
Original Text