US Senator Chris Murphy has introduced plans to introduce laws banning prediction markets he described as “corrupt and destabilizing” platforms.
In a February 27 assertion, the Connecticut Democrat lawmaker argued that insiders with superior information of geopolitical occasions exploit these markets for private monetary acquire.
Lawmaker’s Push to Ban Prediction Markets Attracts Trade Hearth
His announcement builds on considerations he voiced earlier this 12 months concerning the commodification of real-world tragedies.
For example his level, Murphy shared a screenshot of Polymarket betting odds associated to army strikes involving Israel and Gaza, noting that the chances shifted amid escalating real-world tensions.
Replace: I am engaged on laws to ban corrupt and destabilizing prediction markets, the place insiders who know the end result (particularly in authorities) can rig the sport to favor sure bets. https://t.co/3psBfodmbK
— Chris Murphy 🟧 (@ChrisMurphyCT) February 27, 2026
Trade consultants, nonetheless, say the senator’s proposal conflates closely regulated home exchanges with offshore platforms that america has already barred from working.
Tarek Mansour, co-founder of the federally regulated home prediction market Kalshi, straight challenged the senator’s premise.
“Senator, regulated prediction markets are not allowed to do war markets. The market you’re posting is unregulated and offshore,” Mansour said.
The Commodity Futures Buying and selling Fee (CFTC) strictly prohibits onshore prediction markets from itemizing derivatives contracts involving terrorism, assassination, or battle. These guidelines additionally prolong to some other actions deemed opposite to the general public curiosity.
Trade advocates argue Murphy is utilizing unlawful offshore markets to justify a blanket ban on home exchanges that already observe strict laws to forestall these situations.
Adam Cochran, a outstanding finance and cryptocurrency analyst, echoed Mansour’s sentiments. Cochran emphasised that offshore platforms providing providers to US clients already face aggressive CFTC enforcement actions.
Moreover, he added that home prediction markets function underneath rigorous federal oversight particularly designed to forestall the insider buying and selling Murphy goals to cease.
In the meantime, Murphy’s potential legislative efforts align with the broader regulatory efforts to curb insider buying and selling inside the fast-rising prediction market house.
In January, U.S. Rep. Ritchie Torres, D-N.Y., launched a brand new invoice. The laws is a focused ethics measure designed to forestall coated authorities officers and elected representatives from buying and selling in prediction markets utilizing nonpublic data.
