{"id":4782,"date":"2026-05-11T18:03:19","date_gmt":"2026-05-11T18:03:19","guid":{"rendered":"https:\/\/siliconvalleymovingpost.com\/?p=4782"},"modified":"2026-05-11T18:03:19","modified_gmt":"2026-05-11T18:03:19","slug":"is-federal-legislation-needed-to-regulate-prediction-markets","status":"publish","type":"post","link":"https:\/\/siliconvalleymovingpost.com\/?p=4782","title":{"rendered":"Is federal legislation needed to regulate prediction markets?"},"content":{"rendered":"
\n

Online prediction markets, like Kalshi and Polymarket, have captured the nation\u2019s attention with high-profile claims of wrongdoing.<\/p>\n

Read more Slain Burbank K9 Spike to be honored in Washington, D.C. ceremony<\/a><\/p>\n

The markets allow users to vote on everything from sports to news events. The Department of Justice recently arrested a U.S. soldier who allegedly won roughly $400,000 from bets using classified intelligence.<\/p>\n

Prediction markets are not a new concept, with trading on futures of agricultural products kicking off in 1898 at the Chicago Mercantile Exchange. Several state attorneys general have sued the platforms, alleging they are gambling operations. Prediction markets, like Kalshi, argue they are a financial exchange \u2014 not a sportsbook.<\/p>\n

U.S. Sen. Richard Blumenthal, D-Conn., recently introduced nationwide legislation that he said would ban wagers on war, crack down on insider trading and protect consumers from fraud.<\/p>\n

Question:<\/strong> Is federal legislation needed to regulate prediction markets?<\/strong><\/p>\n

Economists<\/span><\/em><\/h4>\n

Alan Gin, University of San Diego<\/strong><\/p>\n

YES<\/strong>: There are too many ways the \u201cprediction\u201d markets can be abused. One is the use of inside information. There have been a number of suspiciously timed transactions ahead of geopolitical events and military strikes, such as the ouster of Nicolas Maduro in Venezuela and the U.S. conflict with Iran. Similar are situations where individuals can influence the results through their actions, such as athletes in sporting events. Finally, there are ethical issues with profiting on things such as deaths, natural disasters and wars.<\/p>\n

James Hamilton, UC San Diego<\/strong><\/p>\n

\n<\/div>\n

NO<\/strong>: Prediction markets are often more accurate than conventional polls and traditional news outlets. I do not see any way to prevent government regulation of these markets from evolving into censorship of ideas and suppression of facts that the country\u2019s rulers would like to hide from the public. I have no problem with prohibiting government employees from betting in these markets. I have a big problem with the government telling me what I should believe.<\/p>\n

Kelly Cunningham, San Diego Institute for Economic Research<\/strong><\/p>\n

NO: <\/strong>Arbitrary one-size-fits-all regulations imposed by politicized bureaucracy are inferior to freely adopted bylaw provisions imposing selective restraints, the wider argument favoring contract law over government law. Compelling evidence shows decentralized systems of market-like bidding generate more accurate predictions than traditional forecasting techniques of surveys or focus groups. Insider betting seems nigh impossible to regulate. The free market allows discovery of best ways to inhibit and punish undesirable behavior \u2014 ways politicians and bureaucrats could never discover.<\/p>\n

Norm Miller, University of San Diego<\/strong><\/p>\n

\n<\/div>\n

YES: <\/strong>While prediction markets might provide useful information for economic pundits, they are essentially gambling sites and potentially are another way to bet on or hedge financial assets like security derivatives. As such, they should require verification of minimum age, restrict insider trading and ban predictions related to war, death and military actions as Blumenthal\u2019s SAFE Act proposes.<\/p>\n

David Ely, San Diego State University<\/strong><\/p>\n

YES: <\/strong>Federal regulation could clarify the powers of the Commodity Futures Trading Commission, or CFTC, to regulate the contracts that trade on prediction markets. Most usefully, legislation could define prediction markets as closer to gambling rather than the markets the CFTC typically oversees and thus give states the clear authority to apply their controls on gambling now in place. Rules to safeguard against insider trading and to impose restrictions on age would be welcome as well.<\/p>\n

Ray Major, economist<\/strong><\/p>\n

YES: <\/strong>The temptation to make money using inside information is too great to leave the prediction market unregulated. These markets have simply become another form of online gambling. Regulations are needed to ensure that the markets operate with integrity and transparency, and prevent market manipulation and insider trading by government officials. Guardrails also need to be in place to prevent profiting from contracts tied to political violence, assassinations or secret military operations.<\/p>\n

Read more Treasury Department tells US banks to flag suspected Iranian money-laundering networks<\/a><\/p>\n

Executives<\/span><\/em><\/h4>\n

Jamie Moraga, Franklin Revere<\/strong><\/p>\n

YES<\/strong>: Without regulation, prediction markets could be misused and manipulated, leading to insider trading, market manipulation and consumer fraud. Prediction markets involve financial risk, similar to online gambling. They allow individuals to participate in contracts tied to future events, including sports, political and economic outcomes, that can be influenced or manipulated. The rapid expansion of prediction markets is outpacing existing oversight and does require stronger regulation to protect consumers.<\/p>\n

Mark Kersey, San Diego County Taxpayers Association<\/strong><\/p>\n

NO<\/strong>: With a big caveat: The U.S. House must follow the Senate\u2019s lead and ban its members and staff from betting via prediction platforms. The White House must also issue an executive order mandating the same ban for all government employees and their immediate family members. If those bans don\u2019t happen, then legislation is necessary. To avoid further eroding the public\u2019s trust, policymakers and government employees cannot be allowed to trade on insider information or policies they help craft.<\/p>\n

Phil Blair, Manpower<\/strong><\/p>\n

YES:<\/strong> This new potential addiction needs to be monitored to protect the young and the innocent, much like any form of gambling. It is far too easy to be abused by those who do not understand the possible ramifications.<\/p>\n

Gary London, London Moeder Advisors<\/strong><\/p>\n

YES:<\/strong> Clearly, some restraining legislation is in order. My more global observation is that I feel that this sort of activity cheapens our society. I\u2019m not against recreational fun gambling, but it seems like it is saturating our communities. It felt better when the betting stayed in Vegas, at the racetracks, or on Wall Street, and didn\u2019t spill over to tribes, sports books and now prediction platforms.<\/p>\n

Bob Rauch, R.A. Rauch & Associates<\/strong><\/p>\n

YES:<\/strong> Federal legislation is needed to close gaps in consumer protection and market integrity, requiring identity verification, prohibiting markets tied to conflict or crime, and limiting platforms to approved jurisdictions. But enforcement is the harder problem. Prediction markets create a manipulation incentive unlike any in traditional finance: a participant who bets $10 million on a corporate acquisition can simply pay to make it happen. Existing surveillance tools weren\u2019t built to detect that. Regulation is necessary, but its limits should be acknowledged.<\/p>\n

Austin Neudecker, Weave Growth<\/strong><\/p>\n

YES:<\/strong> Today\u2019s prediction markets are prone to abuse. The recent case of a U.S. military member using classified intelligence and growing concerns around athletes influencing game outcomes underscore how difficult insider trading is to detect or prevent. Many contracts involve outcomes that can be influenced or known early by participants. Regulation should narrow allowable markets and treat them closer to gambling, with strict limits and disclosures. The goal is to reduce obvious avenues for manipulation.<\/p>\n

Chris Van Gorder, Scripps Health<\/strong><\/p>\n

YES:<\/strong> The federal government should act. Prediction markets take online gaming to a level akin to insider trading. I also think online gambling should be illegal nationwide. As Warren Buffett recently said, these online gambling and predication markets are one of the biggest regressive tax schemes in the country. We need not only more regulation, but more efforts to help those with a\u00a0gambling addiction.<\/p>\n

Not participating this week:\u00a0<\/strong><\/p>\n

Caroline Freund, UC San Diego School of Global Policy and Strategy<\/p>\n

Have an idea for an Econometer question? Email me at phillip.molnar@sduniontribune.com. Follow me on Threads: @phillip020<\/em><\/p>\n

Read more Orange County baseball Top 25: Mission Viejo, San Clemente rising<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Federal legislation is needed to close gaps in consumer protection,” said one business leader.<\/p>\n","protected":false},"author":1,"featured_media":4781,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-4782","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nIs federal legislation needed to regulate prediction markets? - Silicon Valley Moving Post<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/siliconvalleymovingpost.com\/?p=4782\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is federal legislation needed to regulate prediction markets? - Silicon Valley Moving Post\" \/>\n<meta property=\"og:description\" content=\""Federal legislation is needed to close gaps in consumer protection," said one business leader.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/siliconvalleymovingpost.com\/?p=4782\" \/>\n<meta property=\"og:site_name\" content=\"Silicon Valley Moving Post\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-11T18:03:19+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/#\\\/schema\\\/person\\\/636e2e5a10a21cf87fe6eb5951e8a6b7\"},\"headline\":\"Is federal legislation needed to regulate prediction markets?\",\"datePublished\":\"2026-05-11T18:03:19+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782\"},\"wordCount\":1213,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/wp-content\\\/uploads\\\/2026\\\/05\\\/59d0e248b4fcf471623b6631aa05293f.webp\",\"articleSection\":[\"Business\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782\",\"url\":\"https:\\\/\\\/siliconvalleymovingpost.com\\\/?p=4782\",\"name\":\"Is federal legislation needed to regulate prediction markets? 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