Pennsylvania lawmakers have decided to take a different approach to the constantly growing debate over prediction markets, choosing regulation instead of outright bans.
Representative Tarik Khan introduced House Bill 2711 last week, proposing a legal framework for companies such as Kalshi and Polymarket that offer contracts tied to future events.
Consumer Protections and Market Integrity
If given the green light, the new bill would set up clear consumer safeguards while protecting market integrity via new standards and allowing certain sports-related contracts to keep operating in the Keystone State.
The bill has attracted bipartisan support, with 24 House members signing on as sponsors, including 20 Democrats and four Republicans. It has been referred to the House Consumer Protection, Technology & Utilities Committee for further consideration.
Under HB 2711, operators would be asked to implement self-exclusion programs, keep a close eye on insider trading, and report suspicious activity involving employees with access to confidential information. Users would need to be at least 21 years old to participate.
The legislation would also prohibit contracts involving high school sports, events involving minors, and markets tied to individual health outcomes, deaths, assassinations, or mass casualty incidents.
Other Bill Highlights
One important provision could prevent established sportsbooks from entering the market while prohibiting prediction market operators from using liquidity providers or market makers that knowingly engage in gaming activities as part of their regular business.
That language could affect companies such as DraftKings and FanDuel, both of which hold sports betting licenses in Pennsylvania.
The proposed framework also features major penalties for violations. For example, operators could be fined up to $10,000 per violation, while repeated offenses involving insider trading or prohibited participation could result in penalties of $50,000 or more.
Companies that ignore court orders could face fines reaching $1 million per day.