Prediction Markets: Some Movement For Legislation; Real Risk In 2027

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Prediction Markets: Some Movement For Legislation; Real Risk In 2027

TD Securities (USA) LLC POLICY NOTE

May 21, 2026

■WRG Crypto Currency Prediction Markets: Some Movement For

■WRG Financial Services

Legislation; Real Risk In 2027

Jaret Seiberg THE TD COWEN INSIGHT

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Legislative risk is rising for prediction markets as Capitol Hill frustration grows with the

jaret.seiberg@tdsecurities.com

industry. We saw this on display at Thursday's Senate Commerce hearing. We do not expect

Congress to enact legislation until the Supreme Court clarifies if states can police event

contracts tied to sports. That suggests the real risk will be in 2027 or later even if there are

headlines this year.

What Is Happening

Senate Commerce on Thursday held a hearing on prediction markets and sports betting.

The witnesses were

■Bill Miller, President & Chief Executive Officer, American Gaming Association

■Mary Beth Thomas, Executive Director, Tennessee Sports Wagering Council

■Scott Sadin, Co-Founder & Co-Chief Executive Officer, Integrity Compliance 360

■Patrick McHenry, Senior Advisor, The Coalition for Prediction Markets

■Harry Levant, Director of Gambling Policy, Public Health Advocacy Institute

One can watch the replay and read the testimony here.

Our View

■We believe Congress is likely to legislate on prediction markets. This is because we detect

significant bipartisan concerns about how these markets operate, who is allowed to buy an

event contract and whether there is market manipulation.

■At its most extreme, Congress could permit states that ban sports gambling to block those

in the state from entering event contracts on sporting events. It also could authorize states

that permit sports betting to tax prediction markets on their sports-related event contracts.