SB4060, the Prediction Markets Security and Integrity Act of 2026, would create a federal framework for online prediction markets while largely returning primary regulatory authority to the states. The bill defines online prediction markets broadly as platforms that allow users to wager on non-financial events, including sports and elections, and sets out extensive federal standards intended to curb fraud, manipulation, insider trading, underage participation, and predatory marketing. It also directs the Attorney General to issue implementing rules and establishes a national self-exclusion list through the Public Health Service Act.
The bill would require any online prediction market operating in a state to do so only under a state wagering program approved by the Attorney General. States would have to designate a regulatory entity, verify user location and age, license operators, prohibit certain wagers, and enforce consumer-protection rules. The bill also imposes recordkeeping, data-sharing, suspicious-transaction reporting, internal controls, reserve requirements, and advertising restrictions, and it bars wagers by individuals under 21, self-excluded users, and certain sports-related insiders. It further amends the Commodity Exchange Act to prohibit event contracts from being listed or traded on an online prediction market, while expressly preserving state and tribal authority to impose stricter rules or ban such markets altogether.
The bill’s impact on state law would be significant because it conditions lawful operation of online prediction markets on state authorization and compliance with state-approved programs, rather than creating a purely federal licensing regime. It would require states to build or designate regulatory infrastructure, adopt verification and enforcement systems, and coordinate with federal authorities. It also amends federal gambling-related law to block these markets from listing event contracts and to support state enforcement, while leaving room for states and Indian tribes to enact stricter restrictions or outright prohibitions.
The general sentiment reflected in the bill text is strongly protective and restrictive. Its findings emphasize consumer protection, public health, integrity of sports and wagering markets, and the need to prevent abuse, fraud, and underage gambling. The bill frames online prediction markets as functionally similar to gambling and highlights harms such as insider manipulation, misuse of sensitive information, addictive design features, and access by minors.
The main points of contention are likely to be the bill’s broad restrictions on what can be wagered, its age-21 minimum, its limits on bonuses and advertising, and its requirement that states obtain Attorney General approval to operate programs. Another likely area of dispute is the bill’s treatment of sports organizations, insider information, and contest-integrity restrictions, as well as the amendment to the Commodity Exchange Act that would bar event contracts on online prediction markets. The bill also appears to raise federalism and preemption questions, although it expressly states that it does not preempt stricter state or tribal laws.
SB4060 would substantially reshape the legal treatment of online prediction markets by creating a federal compliance framework tied to state authorization, while also amending the Commodity Exchange Act to prohibit event contracts from being listed or traded on such platforms. It would require states that choose to permit these markets to establish regulatory entities, licensing and verification systems, consumer safeguards, reporting obligations, and enforcement mechanisms, and it would authorize federal and state enforcement actions against violations. The bill would also add a national self-exclusion list to the Public Health Service Act and impose new restrictions on advertising, deposits, bonuses, data use, and participation by minors and certain insiders.
The bill’s tone is generally skeptical of online prediction markets and strongly supportive of tighter regulation. Its findings and operative provisions reflect concern about gambling-like harms, fraud, manipulation, underage access, and misuse of sensitive information. Because no committee transcript or vote record is provided, there is no recorded debate or voting sentiment to assess beyond the bill’s text, which clearly favors strict consumer-protection and state-control measures.
Likely points of contention include whether online prediction markets should be treated as gambling, whether the federal government should require Attorney General approval of state programs, and whether the bill’s restrictions are too broad for legitimate market activity. Industry participants may object to the ban on event contracts, the age-21 limit, the prohibition on reload bonuses and VIP-style incentives, and the advertising curbs. States and tribes may support the bill’s preservation of their authority, but could still dispute the federal approval process and the operational burdens imposed on state regulators and market operators.