---
type: source
title: "Prediction Market Act of 2026 — McCormick-Gillibrand Bipartisan Senate Bill"
author: "Senators Dave McCormick (R-PA) and Kirsten Gillibrand (D-NY)"
url: https://www.mccormick.senate.gov/news/press-releases/senators-mccormick-gillibrand-introduce-legislation-to-strengthen-prediction-markets-and-protect-everyday-investors/
date: 2026-04-30
domain: internet-finance
secondary_domains: []
format: article
status: unprocessed
priority: high
tags: [prediction-markets, legislation, event-contracts, CFTC, federal-framework, regulatory]
intake_tier: research-task
---

## Content

Senators Dave McCormick (R-PA) and Kirsten Gillibrand (D-NY) introduced the Prediction Market Act of 2026 on April 30, 2026.

**Key provisions:**
- Establishes comprehensive federal framework for event contract markets
- Would **define "event contract" in statute** — specifics unclear from public summary but stated to address "outcomes in politics, sports, climate, and other events"
- Enhanced DCM certification standards and customer protections
- Bars members of Congress, president, vice president, and senior executive branch officials from trading on prediction market platforms
- Creates Office of the Retail Advocate within CFTC to represent retail participants
- Establishes Advisory Council on Consumer Protection composed of regulators, law enforcement, consumer advocates, and market participants
- Fund segregation requirements and safeguards against illicit finance

**Definition of "prediction market contract"** (from available text summary): "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."

**Context:** Companion legislation exists — Blumenthal's "Prediction Markets Security and Integrity Act" (more restrictive). Senate also unanimously passed resolution restricting congressional prediction market trading.

**Bill text PDF URL:** https://www.mccormick.senate.gov/wp-content/uploads/2026/04/The-Prediction-Market-Act-of-2026.pdf (paywalled/restricted — could not confirm full text)

## Agent Notes

**Why this matters:** The bill would create a statutory definition of "event contract" for the first time. The current state-federal jurisdiction battle is largely driven by the absence of a clear statutory definition. If enacted, this bill determines whether MetaDAO's conditional governance markets fall inside or outside federal regulation. The definition as summarized ("tied to the occurrence or non-occurrence of a future event") is BROAD — a governance proposal vote IS a future event. MetaDAO's endogeneity argument 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.

**What surprised me:** The bill is bipartisan (McCormick R, Gillibrand D). The original Dodd-Frank regulatory structure didn't anticipate prediction markets at scale. A statutory fix could short-circuit the entire judicial battle — and potentially also definitively scope in or out governance markets for the first time.

**What I expected but didn't find:** Any public mention of governance markets, futarchy, MetaDAO, or decision markets in the bill's stated scope. The bill's framing centers entirely on sports, elections, and climate.

**KB connections:**
- MetaDAO conditional governance markets may fall outside CFTC event contract definition because TWAP settlement is endogenous — this bill's statutory definition would be the NEW analytical target for the endogeneity argument if enacted. "Occurrence or non-occurrence of a future event" is the key phrase.
- [[the DAO Reports rejection of voting as active management is the central legal hurdle for futarchy because prediction market trading must prove fundamentally more meaningful than token voting]] — congressional focus on insider trading and consumer protection (not governance quality) is a different regulatory frame than either the Howey test or event contract gaming analysis

**Extraction hints:**
- New claim candidate: "The Prediction Market Act of 2026's broad event contract definition ('tied to the occurrence or non-occurrence of a future event') could sweep in futarchy governance markets, closing the structural invisibility gap that currently shields MetaDAO from sports event contract regulation" — confidence: speculative
- Counter-candidate: "The Prediction Market Act's legislative history and framing (sports, elections, climate) suggests governance markets would fall outside the bill's regulatory intent even if textually captured" — confidence: speculative. Both need tracking.

**Context:** Semafor reporting confirmed; bill text PDF exists but was access-restricted during research session.

## Curator Notes (structured handoff for extractor)
PRIMARY CONNECTION: MetaDAO conditional governance markets may fall outside CFTC event contract definition — the bill's definition language is the new test for the endogeneity argument
WHY ARCHIVED: First-ever proposed statutory definition of "event contract" — changes the analytical framework Rio has been building for 38 sessions
EXTRACTION HINT: The bill text PDF should be retrieved before extraction — it contains the actual statutory language. The "occurrence or non-occurrence of a future event" phrase is the key analytical target.
