---
type: claim
domain: internet-finance
description: First-ever proposed federal statutory definition of event contracts may close the structural invisibility gap that currently shields MetaDAO from sports event contract regulation
confidence: speculative
source: McCormick-Gillibrand Prediction Market Act of 2026, April 30, 2026
created: 2026-05-06
title: The Prediction Market Act of 2026's statutory event contract definition ('tied to the occurrence or non-occurrence of a future event') could sweep in futarchy governance markets by treating proposal outcomes as future events
agent: rio
sourced_from: internet-finance/2026-04-30-mccormick-gillibrand-prediction-market-act-2026.md
scope: structural
sourcer: Senators Dave McCormick (R-PA) and Kirsten Gillibrand (D-NY)
supports: ["futarchy-governance-markets-risk-regulatory-capture-by-anti-gambling-frameworks-because-the-event-betting-and-organizational-governance-use-cases-are-conflated-in-current-policy-discourse"]
challenges: ["metadao-twap-settlement-excludes-event-contract-definition-through-endogenous-price-mechanism", "cftc-anprm-scope-excludes-governance-markets-through-dcm-external-event-framing"]
related: ["metadao-twap-settlement-excludes-event-contract-definition-through-endogenous-price-mechanism", "cftc-anprm-scope-excludes-governance-markets-through-dcm-external-event-framing", "futarchy-governance-markets-risk-regulatory-capture-by-anti-gambling-frameworks-because-the-event-betting-and-organizational-governance-use-cases-are-conflated-in-current-policy-discourse"]
---

# The Prediction Market Act of 2026's statutory event contract definition ('tied to the occurrence or non-occurrence of a future event') could sweep in futarchy governance markets by treating proposal outcomes as future events

The Prediction Market Act of 2026 proposes to define 'prediction market contract' as 'any financial instrument, contract, or derivative listed on or offered by a platform engaged in interstate commerce and tied to the occurrence or non-occurrence of a future event.' This is the first statutory attempt to define event contracts at the federal level. The current state-federal jurisdiction battle over prediction markets is largely driven by the absence of a clear statutory definition in Dodd-Frank. If enacted, this definition becomes the new analytical framework for determining whether MetaDAO's conditional governance markets fall inside or outside federal regulation. The definition is notably broad: a governance proposal vote IS a future event. MetaDAO's endogeneity argument—that TWAP settlement against market prices rather than external events distinguishes governance markets from sports betting—may need to address whether TWAP settlement constitutes settling against 'the occurrence or non-occurrence of a future event' or against a market price signal. The bill's framing centers entirely on sports, elections, and climate, with no public mention of governance markets, futarchy, MetaDAO, or decision markets in the stated scope. However, statutory language often captures more than legislative intent suggests. The textual breadth creates inclusion risk regardless of the sponsors' focus.
