Bipartisan Scrutiny Turns Up Heat on U.S. Prediction Markets

U.S. lawmakers from both parties, led by Mick Mulvaney and Senator Chris Murphy, are pushing for stricter oversight and bans on certain prediction market contracts.

By: AXL Media

Published: Mar 3, 2026, 10:14 AM EST

Source: The information in this article was sourced from Gambling Insider

The "Gambling Is Not Investing" Movement

Mick Mulvaney, former Chief of Staff for President Donald Trump, has joined the fight against federal oversight of prediction markets. Acting as the executive director of the new lobbying group Gambling Is Not Investing, Mulvaney is advocating for these platforms to be regulated at the state level as traditional gambling entities rather than as federal financial derivatives. "If it looks like a sports bet, if it sounds like a sports bet... it's a sports bet," Mulvaney stated, rejecting the claim that event-based contracts are distinct from sportsbooks. This coalition includes conservative groups like Moms for America and the Hispanic Leadership Fund, signaling a significant shift in the Republican approach to the sector.

Democratic Alarm Over Enforcement "Gutting"

While Republicans focus on the gambling distinction, leading Democrats are sounding the alarm over the gutting of the CFTC's enforcement capabilities. Senators Dick Durbin, Amy Klobuchar, and others have challenged CFTC Chairman Michael Selig over reports that the agency's Central Regional Office in Chicago now has zero enforcement attorneys. The senators argue that a 25% decline in overall enforcement staff has left the agency unable to oversee the rapidly growing and volatile event contract market. This lack of oversight is particularly concerning as the industry expands into politically sensitive and ethically questionable territories.

Push to Ban "Perverse" Death Contracts

The controversy surrounding "death markets" contracts that pay out based on an individual's demise has reached a boiling point in Washington. A group of six senators recently demanded that the CFTC clearly and categorically reiterate its ban on these contracts. Lawmakers argue that allowing financial incentives for death or physical injury creates "perverse" moral implications and presents grave national security risks. The fear is that such markets could incentivize the disclosure of classified information or the incitement of violence for financial gain, particularly in high-tension geopolitical environments like Iran or Venezuela.