HR-7840-119
Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
Sponsored by Blake Moore (R-UT)
What it does
This bill would amend the Commodity Exchange Act to prohibit regulated exchanges from listing "event contracts" (a type of derivative allowing people to bet on whether an event will occur) tied to elections, war, terrorism, assassination, illegal activity, gaming, or government conduct. It would let the Commodity Futures Trading Commission (CFTC) ban other similar contracts it deems contrary to the public interest, and would let individual states opt out of the gaming-contract ban by passing a law expressly exempting themselves.
Who benefits
Traditional sports betting and gaming companies operating under state licenses, which face less competition from unregulated federally-listed event-contract platforms; state governments and gaming regulators who currently collect licensing fees and taxes from gambling but see that revenue bypassed by exchange-traded contracts; states that choose to exempt themselves could see continued or new gaming-contract markets and associated tax revenue.
Who is hurt
Prediction market companies (such as Kalshi and similar platforms) that currently offer election and event contracts through CFTC-registered exchanges; traders and investors who use these contracts to hedge risk or speculate on political and world events; researchers and forecasters who use prediction market prices as informational tools; consumers who may face fewer regulated alternatives to unregulated offshore betting markets.
Supporters argue
Supporters argue that election and war-related betting contracts create troubling incentives — including potential manipulation of election outcomes, insider trading on government actions, and normalization of betting on tragedies like terrorism or assassination — while undermining state authority over gambling policy. They contend that federal commodities law was never intended to let exchanges bypass state gaming regulation and consumer protections, and that this bill restores clear boundaries while letting states decide for themselves on gaming contracts specifically.
Opponents argue
Opponents argue that prediction markets provide valuable, transparent price signals about elections and world events that outperform polling in some studies, and that a blanket ban removes a regulated, CFTC-supervised alternative that could push activity to unregulated offshore or black-market platforms. They contend the broad grant of authority letting the CFTC ban any "similar activity" it deems "contrary to the public interest" is vague and could sweep in legitimate hedging products, raising nondelegation concerns about how much discretion Congress can hand an agency without clear standards.
Constitutional context
The bill raises Commerce Clause questions since Congress is regulating derivatives traded on national exchanges, a core interstate commerce activity clearly within Congress's authority. The provision letting the CFTC ban additional "similar activity" it deems "contrary to the public interest" raises nondelegation concerns under Article I, §1, and post-Loper Bright (2024) courts would independently review whether the CFTC's interpretation of this standard is properly grounded in the statute rather than deferring to the agency.
Checks and balances
Congress would set the statutory prohibitions directly while delegating a residual category ("other similar activity") to CFTC rulemaking, with courts now applying independent judgment (post-Loper Bright) rather than automatic deference when reviewing CFTC's expansion of that category.
Historical precedent
The CFTC previously attempted to block election-related event contracts administratively (its 2024 action against Kalshi's election contracts), which courts allowed to proceed pending litigation, making this bill an effort to achieve through statute what the agency could not clearly achieve through rulemaking alone.