A federal bill to ban several core markets currently available on prediction platforms has been introduced. If passed, the proposal would force operators, like Kalshi, to cease trading tied to war, terrorism, elections, government decisions, games of chance and illegal activity.
Pertinently, the bill would also prevent operators from offering sports event contracts by default. Presented by Rep. Blake Moore and Rep. Salud Carbajal on March 6, 2026, the bipartisan 'Event Contract Enforcement Act' (ECEA) seeks to control prediction platforms by placing a blanket ban on controversial and ethically questionable trading options.
ECEA to prevent "needless risk" posed by prediction platforms
In a statement, Rep. Moore outlined that the under-regulation of modern prediction platforms places unnecessary risks on public and national security. The Utah Official expressly pointed to dangers posed by markets tied to war, assassination, terrorism and illegal activities:
"Under-regulated prediction markets have exposed America to needless public safety and national security risks by allowing traders to invest in outcomes related to sensitive matters like terrorism, assassination, war, or elections", said Moore.
Moore continued to underline that sports event contracts have entered many states where there is little appetite for traditional sports betting – effectively introducing a form of sports gambling where such products are not allowed:
"Prediction markets also sponsor sports-related contracts against the wishes of many states, including Utah, that would otherwise prohibit these contracts if offered as traditional sports betting.
"I am excited to partner with my friend, Rep. Carbajal, on this nonpartisan issue to ensure event contracts can continue to serve legitimate business interests while protecting Americans from risk."
Meanwhile, California Rep. Carbajal described prediction markets as a haven for illegal trading.
"Under-regulated prediction markets are creating an environment ripe for insider trading. The monetization of military activities or election processes threatens our national security and further erodes public trust in the Government", argued Carbajal.
"The Event Contract Enforcement Act is a strong first step toward protecting consumers and upholding ethical standards across all levels of government. I am committed to working across the aisle to bring transparency and accountability to this under-regulated sector."
Prediction markets being used for nefarious purposes?
Rep. Moore's press release also hits out at the alleged misuse of contemporary prediction platforms.
According to a statement posted on the Utah Representative's platform, prediction markets had previously been used as "financial instruments" by workers in select industries – particularly farming – to mitigate losses.
The recent expansion of contracts-based operators, like Polymarket and Kalshi, is deemed by Rep. Moore to continuously erode a trading industry that had been leveraged in good faith.
A statement reads: "Event contracts are longstanding financial instruments that many industries, particularly farmers, use to hedge against potential losses.
"In recent years, prediction markets have sponsored contracts related to topics that expose our country to national security, public safety, or insider trading risks by creating incentives for insiders to leak or profit from exclusive information, or for criminals to invest in contracts related to their own wrongdoing."
Moreover, both legislators detailed precisely how certain contracts can induce illegal or dangerous behavior:
"Contracts based on illegal activity create perverse incentives for criminals to commit crimes to trigger payouts. Contracts related to government or military activity create an incentive for insiders to 'bet on' or leak sensitive information for profit. Election contracts create incentives to manipulate democratic processes.
"Contracts related to federal or state government functions create endless opportunities for insider trading on actions taken by elected officials, appointees, or other government personnel, in some cases exposing elected officials to safety risks."
Rep. Moore and Rep. Carbajal then urged Congress to take direct action against prediction platforms: "Congress must require the CFTC to enforce against illicit contract types to mitigate these risks."
Should the ECEA be signed as federal law, all prediction platforms regulated by the Commodity Futures Trading Commissions (CFTC) would be forced to remove ethically grey markets as well as options tied to domestic safety concerns.
States may opt-out of sports trading ban
Although the ECEA seeks to outrightly ban all sports event contracts by default, the bill would allow states to continue offering such products if desired.
To avoid being impacted by the full-scale ban on sports predictions, states must opt-out of the ruling by passing an exemption bill before the ECEA takes effect. According to the bill description, that would give lawmakers no more than 180 days after the motion is passed to make a decision.
Speaking to Gambling Insider, Rep. Moore explained that this exclusion clause was developed through an understanding that certain states "may be okay with" sports trading:
"We know that there are states that may be okay with the current framework, so we want to still provide an opportunity for the states to self-govern on non-national security-related topics."
This exemption-based system is reminiscent of a structure permitted by PASPA – the ruling that enforced a federal ban on sports gambling until 2018 – that allowed Nevada to offer sports betting as the state already had a regulated sports gambling industry, and did not want to relinquish control of that market.
Moore went on to describe prediction markets as "out of control" and "dangerous" products that must be controlled for domestic safety:
"We put this legislation forward because activity in this space is starting to spiral out of control, and we need to ensure we have proper guardrails in place. We shouldn't be investing in outcomes related to national or personal security. It's a dangerous game that we're trying to constrain."
Will Congress pass the ECEA bill?
It is expected that the ECEA will first be discussed by a subcommittee before heading to the House Committee on Agriculture, which oversees all CFTC-regulated operations.
But, despite delineating a concise argument against certain derivatives, there is no guarantee that the bipartisan bill will pass. Significant lobbying on both sides is to be expected.
This week, Kalshi's Head of Communications Elisabeth Diana responded to a separate, similar bill presented by Sen. Adam Schiff, which seeks to end trading related to war and death. Diana posted the following on X (formerly Twitter):
"Kalshi already bans insider trading and markets directly tied to death and war. As a US-based exchange, we support regulators and policymakers from both sides of the aisle in their efforts to keep these markets safe and responsible in America."
Kalshi Co-Founder and CEO Luana Lopes Lara reposted her colleague's message. The operator's stance is quite transparent.
Nevertheless, if the bill advances through the House and Senate, it would be submitted to President Donald Trump for signing.
Given President Trump's family affiliation with prediction operators – his son, Donald Trump Jr. sits on Polymarket's advisory board – it remains unclear whether the ECEA will gain support from the Oval Office.
