New Jersey Senate President Pro Tempore Shirley K. Turner has introduced legislation that would ban certain prediction markets and require markets pertaining to sporting events to operate under the state's current sports betting laws.
Key Takeaways
- The legislation proposes prohibiting prediction markets involving political elections or catastrophic events.
- Markets offering contracts tied to athletic events would need to obtain proper licensure.
- Turner said the current model exposes New Jersey residents to unnecessary risk.
Turner's Senate Bill 3692 makes New Jersey the latest U.S. jurisdiction to raise concerns regarding prediction market platforms. Instead of pushing for a complete ban, Turner is seeking to prohibit prediction markets associated with political elections, deaths, or catastrophic events. This means Kalshi would no longer be able to include markets for the 2028 U.S. presidential election winner or which world leaders will be out this year.
Prediction markets related to sporting events would still be permitted, provided they are properly licensed or partner with a licensed New Jersey sports betting operator.
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Seeking to level playing field
Under the current system, prediction market platforms are federally regulated by the Commodity Futures Trading Commission, while New Jersey online sportsbooks are closely monitored by the New Jersey Division of Gaming Enforcement.
Both options are available to Garden State customers, but Turner has raised concerns about the current disparity.
“New Jersey already has a comprehensive, tightly regulated sports betting system that prioritizes consumer protection, responsible gaming, and transparency,” Turner said. “Allowing prediction markets to offer similar wagering opportunities without those same guardrails creates an uneven playing field and exposes residents to unnecessary risk.”
Current sports betting legislation includes a prohibition on in-state college athletic teams and events. This means DraftKings and FanDuel are not permitted to offer odds on any games in the NCAA Tournament East Regional at the Prudential Center.
Kalshi, on the other hand, is showing prediction markets for Harvard-Princeton and Rider-Iona men's basketball games.
Maintaining integrity
If the legislation passes, New Jersey would establish consumer protection standards, anti-fraud requirements, and transparency measures. Additionally, it would authorize New Jersey's attorney general to seek injunctive relief and significant civil penalties against operators who violate the law.
Integrity, especially regarding sports betting, continues to be a major concern, as large-scale betting scandals have been making headlines. The most recent NCAA betting scandal included federal prosecutors indicting 20 people on charges related to fixing Division I college basketball games. New Jersey college teams did not have outcomes of their games impacted by this scandal.
While prediction markets are not connected to this case, they've faced their own integrity concerns, with insider trading chief among them.
"When money is tied to outcomes, it creates incentives for manipulation and abuse, whether involving elections, public discourse, or sporting events," Turner said. "If a company is offering products that look and function like sports betting, they should be subject to the same rules, oversight, and responsibility to protect consumers. This legislation draws a clear line between innovation and exploitation.”
