On Monday, March 17, 2026, Senator Chris Murphy (D-CT) and Representative Greg Casar (D-TX) introduced the Banning Event Trading on Sensitive Operations and Federal Functions Act — better known as the BETS OFF Act. The bill is the latest in a wave of Democratic legislation targeting the prediction market industry, which has grown from a niche trading venue into a multibillion-dollar sector influencing political and policy narratives in real time.
TL;DR
The BETS OFF Act would make it illegal for CFTC-regulated prediction market platforms to list or trade contracts tied to government actions, acts of terrorism or war, assassination, or any event where a participant "knows or controls the outcome." It does not ban prediction markets outright — only specific categories of contract that Congress considers too sensitive or subject to manipulation.
Full Bill Name and Sponsors
| Full Title | Banning Event Trading on Sensitive Operations and Federal Functions Act |
| Short Name | BETS OFF Act |
| Senate Sponsor | Sen. Chris Murphy (D-CT) |
| House Sponsor | Rep. Greg Casar (D-TX) |
| Introduced | Monday, March 17, 2026 |
| Regulator Targeted | Commodity Futures Trading Commission (CFTC) |
| Primary Goal | Prohibit CFTC-regulated platforms from listing contracts on government actions and sensitive national security events |
What the BETS OFF Act Would Ban
The bill targets CFTC-regulated prediction market platforms specifically — meaning it would apply to exchanges like Kalshi, which operates under a CFTC-issued Designated Contract Market (DCM) license, and any future platforms that seek similar federal authorization. Here are the five categories of contracts the bill would prohibit:
Government Actions
Contracts whose outcome is determined by a U.S. federal, state, or local government decision, vote, ruling, or policy action. This would include contracts on Congressional votes, executive orders, regulatory decisions, and election outcomes.
Acts of Terrorism
Contracts tied to whether a terrorist attack occurs, its location, scale, or attribution. Sponsors argue such contracts create a financial incentive for bad actors to execute attacks.
Acts of War
Contracts on military action, conflict initiation, or troop deployment outcomes. Applies to both U.S. and foreign military activity.
Assassination
Contracts on whether a named individual — including elected officials, heads of state, or public figures — will be killed.
"Knows or Controls the Outcome"
A broad catchall prohibiting contracts on any event where a participant in the market has material non-public information or control over the event's result — specifically targeting trades by government insiders, lawmakers, and officials.
Which Platforms Would Be Affected?
The bill applies to CFTC-regulated prediction market platforms — not unregulated or offshore markets. In practice, that means:
Kalshi
🔴 In scopeOperates as a CFTC-licensed Designated Contract Market (DCM). Lists contracts on election outcomes, Fed decisions, and Congressional actions — all of which could be prohibited.
Polymarket
🟡 Indirect pressureCurrently operates offshore (crypto-based, Polygon network). Not directly CFTC-regulated, but the bill could accelerate pressure to restrict U.S. user access.
PredictIt
🟠 At riskOperates under a CFTC no-action letter. The bill could invalidate existing exemptions for political event contracts.
New entrants
🔴 Pre-blockedAny platform seeking a new CFTC DCM license would be prohibited from listing the banned contract categories from day one.
Political Context: Why Democrats Are Acting Now
The BETS OFF Act arrives amid growing Democratic frustration with prediction markets that allow trading on Congressional votes, executive actions, and regulatory decisions — markets where lawmakers and government officials may hold material non-public information. The concern is dual:
- Insider advantage: A senator who knows how a vote will go can profit from a prediction market contract on that vote before the public does — a form of legally gray insider trading not yet clearly addressed by the STOCK Act.
- Perverse incentives: Markets that assign probability to government outcomes may, in theory, create financial incentives for actors to influence those outcomes — particularly for low-probability/high-payout contracts on extreme events like assassinations or terrorist attacks.
Critics of the bill, primarily from the libertarian and crypto communities, argue that prediction markets on government actions are among the most valuable for accountability — providing real-time public probability estimates that no polling or media coverage can replicate. Platforms like Kalshi have argued their contracts improve price discovery and give the public a clearer picture of legislative and regulatory risk.
Counter-argument
Prediction market advocates contend that banning government-action contracts removes some of the most informative markets for public policy transparency — and that the "controls the outcome" provision is so broad it could chill any contract where a regulator might theoretically influence the result.
Legislative Status
The BETS OFF Act was introduced on March 17, 2026. As of publication, it has been referred to committee and does not yet have a scheduled hearing date. Democrats are currently in the minority in both chambers, meaning the bill faces significant structural headwinds to passage in its current form. However, the introduction signals continued Democratic intent to legislate limits on prediction market activity — particularly around elections and government functions — ahead of the 2026 midterm cycle.