Merkley and Raskin Move to Ban Election and Sports Bets on US Exchanges

Two Democrats want prediction markets off the board. Sen. Jeff Merkley of Oregon and Rep. Jamie Raskin of Maryland dropped companion bills on March 26 — S. 4226 and H.R. 8123 — that would ban election, sports and military event contracts from trading on federally registered exchanges. If it ever becomes law, Kalshi and Polymarket US would have to pull those listings. For now, it's just paper: both bills sit at the introduced stage, according to Congress.gov, and neither has moved.

The target list is broad. The text prohibits contracts tied to any political election or contest, any sporting event or contest, and military action by the US or a foreign government. It also reaches contracts on actions by the executive, legislative and judicial branches. One carve-out exists: government-action contracts used to hedge or mitigate commercial risk, as the Commodity Futures Trading Commission defines by rule. That exception doesn't touch elections, sports or military markets.

The money on the line is real. A Washington Post analysis published Nov. 3 estimated nearly $1.9 billion in midterm-related trading across Kalshi and Polymarket as of late Nov. 2 — about $1.3 billion on Kalshi and $600 million on Polymarket. Those are trading figures, not platform revenue. And because the bill is written to bind contracts offered 'on or through a registered entity,' the international Polymarket platform sits outside its reach — so that combined estimate isn't volume the law would automatically erase.

The sponsors pitch the ban as an anti-corruption play. In their March 26 announcement, Merkley said betting on government decisions or military strikes is 'ripe for corruption and erodes public trust.' The bill would replace the CFTC's existing case-by-case public-interest review of gaming and war contracts under the Commodity Exchange Act with an explicit statutory ban on its named categories. State-regulated gambling, including traditional sports betting, would stay intact, the sponsors say.

Polymarket has been arguing it can police itself. In an Oct. 27 announcement, the company said its US and international teams pair automated detection with human investigations to catch insider trading and election-market manipulation. Sens. Elizabeth Warren and John Curtis later asked both companies for proof their election safeguards work, as The Defiant previously reported. Even airtight surveillance wouldn't save listings the bill outlaws.

Next stop is the same place it's been since introduction. The Senate bill is referred to the Agriculture, Nutrition, and Forestry Committee, and the House version sits with the Agriculture Committee. Polymarket's foreign operations would face a different fate: the bill calls for a Government Accountability Office study on how Congress could tackle illegal activity in offshore prediction markets and companies operating across borders.