S. 4226: Stop Trading On Predictions and Corrupt Bets Act of 2026

The bill known as the Stop Trading On Predictions and Corrupt Bets Act of 2026 aims to amend the Commodity Exchange Act by prohibiting certain types of event contracts in prediction markets. Here is a breakdown of its main provisions:

Prohibition on Event Contracts

The bill seeks to prohibit agreements, contracts, transactions, or swaps related to:

• Political elections or contests
• Actions by U.S. government branches
  • This includes actions taken by the executive, legislative, or judicial branches
• Sporting events or contests
• Military actions
  • This pertains to military actions taken by the United States or any foreign country

However, there is an exception for contracts used for hedging or mitigating commercial risk, which may still be allowed under certain conditions determined by the regulatory agency.

Congressional Intent

The bill includes a statement of Congress' intent, asserting that:

• Even with this new prohibition, the goal is to stop activities identified as harmful under the existing Commodity Exchange Act.
• The Commodity Futures Trading Commission (CFTC) should restrict any trading that does not involve hedging or mitigating commercial risk to prevent similar regulatory structures that permit gambling.
• This legislation does not override any state laws that already regulate or prohibit gambling or gaming.

Government Accountability Office Study

Within 60 days of the bill's enactment, the Comptroller General of the United States is required to:

• Conduct a study on prediction markets that will examine:
• Insider trading within these markets
• The effects of trading in prediction markets on individuals aged 18 to 20
• Explore other types of prediction markets that might still be permissible under the updated Commodity Exchange Act.
• Investigate means to tackle illegal activities in both foreign and domestic prediction markets.
• Publish a report with study findings and recommendations for Congress regarding the integrity of prediction markets.

Summary

In essence, this bill aims to regulate prediction markets by banning speculation on specific events that could influence public policy or societal outcomes, while still allowing for commercial risk management practices.

Relevant Companies

None found