# Prediction Market Act of 2026

## Overview

Bipartisan legislation introduced by Senators Dave McCormick (R-PA) and Kirsten Gillibrand (D-NY) on April 30, 2026 to establish federal regulatory framework for prediction markets. Amends the Commodity Exchange Act to create statutory definition of prediction market contracts and direct CFTC oversight.

## Key Provisions

**Statutory Definition:** Defines "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."

**Insider Trading Framework:**
- Prohibits Congress, president, VP, and senior executive branch officials from trading prediction markets
- Directs CFTC to prohibit trading on material nonpublic information
- Requires CFTC to define enforceable insider trading standards for prediction markets

**Consumer Protections:**
- Enhanced certification standards for exchanges listing event contracts
- Retail-friendly disclosure requirements
- New CFTC Office of the Retail Advocate
- Customer funds fully segregated from operational accounts
- KYC/AML compliance required

## Legislative Context

- Introduced same day CFTC ANPRM comment period closed (April 30, 2026)
- Senate unanimously passed resolution restricting congressional trading on prediction markets
- Strong bipartisan political momentum
- No DAO governance exclusions or blockchain-specific provisions in available summaries
- Full bill text PDF returned 403 error; Congress.gov text version not yet confirmed accessible

## Regulatory Implications

**Governance Market Risk:** The broad "occurrence or non-occurrence of a future event" definition could sweep in DAO governance proposal markets, as proposal votes are future events. Creates new statutory track independent of CFTC event contract framework.

**Platform Qualifier:** "Platform engaged in interstate commerce" requirement may create structural distance for decentralized protocols like MetaDAO that don't operate as traditional platforms.

**Endogeneity Defense:** The statutory language focuses on the event being predicted rather than settlement mechanism, potentially overriding endogeneity arguments that work under current CFTC framework.

## Timeline

- **2026-04-30** — Bill introduced by Senators McCormick and Gillibrand
- **2026-04-30** — CFTC ANPRM comment period closes same day (regulatory-legislative convergence)

## Related Entities

- [[dave-mccormick]]
- [[kirsten-gillibrand]]
- [[cftc]]

## Sources

- Senate Press Release: https://www.mccormick.senate.gov/news/press-releases/senators-mccormick-gillibrand-introduce-legislation-to-strengthen-prediction-markets-and-protect-everyday-investors/
- Multiple bill summaries (full text not yet accessible)