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119-s-4469119th CongressWALLET

Prediction Market Act of 2026

Sponsored By: Senator McCormick, David [R-PA]

Introduced

Summary

Would bring event contracts (prediction markets) under a new CFTC regulatory framework that emphasizes consumer protection and market integrity. The bill would set marketing and disclosure limits, AML/KYC and clearing rules, insider-trading bans for top officials, advisory bodies, and studies to guide future rules.

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  • Retail investors: The bill would create an Office of the Retail Advocate, an Advisory Council with 15 members, and an ombudsman to study consumer protections, push clearer disclosures, limit deceptive marketing, and expand financial-literacy outreach.
  • Public officials and market integrity: The bill would bar Members of Congress, the President, the Vice President, and certain senior executive officers from trading event contracts and direct the CFTC to block contracts that are contrary to the public interest, including those tied to terrorism, assassination, war, violence, or similar harms.
  • Market operators and clearinghouses: The bill would require AML/KYC programs, age verification, segregation of member funds and default funds, clearer risk disclosures to customers, and studies of market size and cross-agency issues. It would also create an Innovation Advisory Committee and require joint and CFTC studies on event contracts.

*Authorizes $30 million per year for fiscal years 2027–2031 to fund CFTC rulemaking, oversight, studies, the Office of the Retail Advocate, and technology for surveillance and enforcement.*

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 2 benefits, 0 costs, 2 mixed.

CFTC funding, studies, and committees

If enacted, the bill would authorize $30 million a year for each fiscal year 2027 through 2031 for the CFTC to implement event-contract rules, do studies, and build surveillance and technology. The CFTC must complete a study on event-contract markets within one year and a joint SEC/CFTC study on jurisdiction and blockchain within 15 months. The bill would also create an Innovation Advisory Committee to meet publicly at least twice a year and advise the Commission on market innovation.

Retail investor protections and education

If enacted, the bill would create an Office of the Retail Advocate to represent non-eligible retail participants and require tailored financial-literacy outreach about event contracts. The bill would create a 15-member Advisory Council on Consumer Protection within 90 days to study retail gaps and report to Congress within 180 days and then twice a year. New rules would require readable disclosures for new event contracts and limit deceptive or misleading marketing, paid or unrepresentative testimonials, and profit promises without clear risk statements. The Commission could impose recordkeeping and penalties for violations.

Clearing and customer fund protections

If enacted, the bill would require rules to keep a direct clearing member's client funds separate from a derivatives clearing organization's own funds when offering event contracts to non-eligible participants. DCOs would have to treat funds for fully collateralized contracts separately from funds for leveraged contracts for default planning. Futures commission merchants, designated contract markets, and swap execution facilities would need to tell customers about risks and possible delays getting funds or assets. DCOs clearing for non-eligible participants would also need anti-money-laundering programs with written policies, staff, training, testing, risk-based customer checks, beneficial-owner verification, and age checks.

Market integrity, bans, and insider rules

If enacted, the bill would define which listed contracts count as "event contracts" (those based on occurrences or contingencies, not just price changes). The Commission could bar event contracts that are contrary to the public interest, including those tied to illegal acts, terrorism, assassination, war, violence, or gambling, after adopting criteria and a 60-day comment period. The Commission would review and update insider‑trading detection and could require exchanges and futures firms to put in enhanced monitoring to deter insider trading in event contracts. The bill would also make it unlawful for Members of Congress, the President, the Vice President, and certain high-level federal officers to enter into event contracts and would require the Commission to write implementing rules.

Sponsors & CoSponsors

Sponsor

McCormick, David [R-PA]

PA • R

Cosponsors

  • Sen. Gillibrand, Kirsten E. [D-NY]

    NY • D

    Sponsored 4/30/2026

  • Sen. Moreno, Bernie [R-OH]

    OH • R

    Sponsored 8/3/2026

Roll Call Votes

No roll call votes available for this bill.

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