PHILADELPHIA, PA — Pennsylvania lawmakers are moving to restrict insider advantages in online betting platforms, proposing new rules that would ban insider trading and limit certain types of wagers in rapidly growing “prediction markets.”
What This Means for You
- New rules could limit who can participate in certain online betting markets
- Platforms may be required to monitor and report suspicious activity
- Some types of bets, including on violent events, could be banned
The legislation, introduced by state Rep. Tarik Khan, D-Philadelphia, and a bipartisan group of lawmakers, targets prediction markets — online platforms where users place bets on real-world outcomes such as elections or economic trends.
Khan said the proposal is designed to address growing concerns that individuals with nonpublic or privileged information can exploit these platforms for profit.
“Right now, people with inside information can game the system,” Khan said. “We’re seeing more and more insider trading on these new prediction markets, and we won’t tolerate that in Pennsylvania.”
What the Bill Would Do
The proposal would prohibit insider trading — using confidential or nonpublic information to gain an advantage — and market manipulation on these platforms.
It would also require companies operating prediction markets to monitor activity for suspicious behavior and report potential violations.
Additional provisions would:
- Ban participation by individuals with inside knowledge or conflicts of interest
- Establish penalties for violations
- Prohibit minors from using the platforms
- Prevent self-dealing by insiders
Lawmakers also included restrictions on certain types of wagers, including bets on death or mass casualty events and limitations on betting involving high school sports.
Enforcement and Oversight
The bill would give enforcement authority to the Pennsylvania Attorney General and local prosecutors, allowing both to pursue violations and impose penalties.
Lawmakers said the proposal is modeled in part on existing safeguards used in traditional financial markets, where insider trading laws are already enforced.
The legislation follows recent federal charges against a U.S. soldier accused of using classified information to profit from prediction market bets, a case cited by supporters as evidence of emerging risks.
Bipartisan Support
The measure has bipartisan backing, with co-prime sponsors from both parties, including lawmakers from Philadelphia, Allegheny, Beaver, Bucks, Lycoming, Union, and Lehigh counties.
Khan said lawmakers are encouraging broader support as the bill moves forward.
“This is about making sure nobody gets an unfair advantage just because they’re on the inside,” he said.
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