A collection of Keystone State lawmakers want prediction markets to play in a state-directed regulatory sandbox or not at all.
House Bill 2497, sponsored by a group of Democratic members, was introduced and referred to the chamber's Gaming Oversight Committee on Friday.
- Pennsylvania lawmakers introduced HB 2497 to regulate prediction markets through state licensing, taxes, and oversight.
- The bill would require operators to pay $1 million in licensing fees, remit taxes on revenue, and face penalties for operating without approval.
- The proposal also bans insider trading, raises the minimum trading age to 21, and allows restrictions on sensitive contracts like election-related markets.
The bill’s preamble spells out why lawmakers believe it is needed, saying, “A regulatory framework at the State level for event outcome prediction wagering is necessary, in light of the adoption of a noninterference approach by the Commodity Futures Trading Commission, to regulate prediction markets.”
And regulate prediction markets it would in Pennsylvania. Or at least it would attempt to do so.
Here goes nothing
HB 2497 would permit prediction markets to do business in Pennsylvania, but operators would have to obtain a license first from the state’s gaming control board. The permits would cost $1 million, then another $1 million for their annual renewal. Prediction market operators that continue to operate without a license in the state could be hit with fines of up to $25,000.
There would be more costs as well. A 20% tax on gross revenue would be applied to licensees, plus another 2% of revenue for a “local share assessment,” which would help fund “grants for projects in the public interest.”
The bill would ban insider trading on prediction markets and allow state gambling regulators to restrict the offering of event contracts involving “sensitive” topics, including those tied to elections, “if the event outcome prediction wagering could affect the outcome of the election."
HB 2497 would also set the legal minimum age of prediction market trading to 21, in line with the legal age for Pennsylvania sports betting.
Time will tell whether the legislation picks up any significant momentum in the state legislature.
However, it seems unlikely that prediction market operators, which are currently regulated by the federal Commodity Futures Trading Commission, would subject themselves to state-level taxation and oversight.
The exchanges' court battles with state regulators that aim to reject the latter’s wishes dominate prediction market news, so suddenly obeying a new state law would be out of character.
Pennsylvania House Gaming Oversight Committee is considering new legislation that would tax prediction markets 22% of gross revenue & an annual $1 million license fee. A team of 12 Democrats is behind the bill. pic.twitter.com/slCvr1tdC0
— Fairplaygov (@fairplaygov) May 11, 2026
Nevertheless, the fact that the Pennsylvania prediction market bill is being proposed at all highlights the growing interest of state lawmakers in trying to impose their own rules for prediction markets.
Those efforts come as the federally regulated exchanges are currently facilitating all kinds of wagering (including on sports) without the say-so of state regulators and legislators, including in states that have yet to legalize sports betting at all.
“Currently, Pennsylvania residents are participating in digital ‘event markets’ - platforms that allow users to trade on the outcome of everything from economic shifts to political elections,” wrote Rep. Danilo Burgos, a sponsor of the bill, in a March memo. “Because these platforms often claim to be ‘financial derivatives’ rather than gaming products, they currently bypass the rigorous safeguards we have spent decades building for our casinos and sportsbooks. This ‘regulatory arbitrage’ leaves our constituents vulnerable and deprives the Commonwealth of significant tax revenue.”
