Sponsors (5)
The bill aims to preserve legitimate commercial hedging and improve market integrity by restricting certain event‑based contracts and requiring a rapid study, but does so at the cost of reduced product variety, lower liquidity and revenue for trading firms, potential job disruption, and regulatory uncertainty that may push activity into less‑regulated venues.
Small businesses and firms that use derivatives retain access to bona fide hedging and a regulated hedging exception (if the CFTC defines it), preserving commercial risk‑management tools.
Financial firms gain clearer CFTC rulemaking authority to define hedging exceptions, enabling tailored, expert-driven regulatory guidance instead of ad-hoc bans.
Limits on certain event‑based contracts (and the mandated study) aim to reduce market manipulation and reputational risks, improving market integrity for mainstream participants.
Financial firms, traders, and ordinary investors face reduced product variety and revenue opportunities because banning/restricting event‑based or prediction contracts will push activity to unregulated or OTC venues and weaken price discovery and transparency.
Small businesses and market participants could see reduced speculative liquidity and wider spreads, increasing hedging and transaction costs.
Trading firms that rely on speculative strategies may lose access to federal clearing and trading venues, potentially disrupting businesses and causing job losses in trading firms.
Based on analysis of 4 sections of legislative text.
Prohibits registered trading entities from offering contracts or swaps that reference elections, government branch actions (except limited CFTC‑defined hedging), sports, or military actions, and orders a GAO study.
Introduced March 26, 2026 by Jeff Merkley · Last progress March 26, 2026
Prohibits registered trading platforms from listing, clearing, or making available for trading any contract, agreement, transaction, or swap that references political elections or contests, actions by U.S. government branches (with a narrow CFTC hedging exception), sporting events, or military actions. Directs the GAO to produce a public report within 60 days on prediction markets, covering insider trading, effects on 18–20-year-old participants, categories of markets not banned by the amended Commodity Exchange Act, and how to address illegal foreign-operated or foreign‑linked markets. Declares Congress’s intent that the Commodity Exchange Act should block non‑hedging prediction markets that resemble gambling, urges the CFTC to prohibit non‑hedging contracts from trading on registered entities, and preserves state authority to regulate or prohibit gambling.