U.S. Democratic Senators Merkley, Warren take aim at prediction markets

WASHINGTON, March 26 (Reuters) - Top U.S. Democratic Senators Jeff Merkley and Elizabeth Warren on Thursday introduced a bill to ban prediction market bets ‌on elections, sports, government and military actions, further increasing pressure on the fast-growing markets.

The bill is one ​of several competing efforts on Capitol Hill ​to rein in prediction markets, after well-timed ⁠bets ahead of the U.S.-Israeli air strikes in ​Iran and Venezuela operations stoked concerns over the ​legality and ethics of such trades.

Here are more details:

• The STOP Corrupt Bets Act would explicitly prohibit event contracts on elections and their outcome; government actions across all branches unless there's a commercial hedging need; U.S. or foreign military actions; and sports.

• Democratic Senator Richard Blumenthal is also a co-sponsor

• Clarifies that these markets are against the intent of the Commodity Exchange Act and that the Commodity Futures Trading Commission must enforce and prevent any market that doesn't have a commercial hedging value to prevent federal gambling.

• The bill is the most sweeping of several efforts Democratic U.S. lawmakers have pushed in recent months, according to Merkley's office.

• The bill has been endorsed by major public interest groups including Project On Government Oversight, Public Citizen and Americans for Financial Reform.

• While the path for the bill to become law is uncertain, it ramps up congressional scrutiny of prediction markets. ​Democratic Representative ​Mike Levin and Senator Adam Schiff earlier this month introduced the DEATH ​BETS Act.

• U.S. Democratic lawmakers Senator Chris Murphy and Representative Greg Casar also this month introduced a similar bill.