New Jersey senator files bill to ban certain prediction markets

While prediction markets have continued to expand throughout the United States, more and more states are looking for ways to prohibit those operations within their jurisdictions as lawmakers believe prediction platforms infringe on their legal gambling industries. New Jersey is the latest state to do so, though a recently introduced Senate bill would not entirely ban all prediction markets.

Introduced by Sen. Shirley Turner, S3692 takes aim at online prediction markets that have quickly spread throughout the country and have justified their existence by emphasizing they operate under the federal regulation of the Commodity Exchange Act.

Turner's bill, however, would only prohibit certain prediction markets while requiring platforms that wish to continue offering allowable markets to obtain a sports betting license in the state or become licensed as an NJ online casino service industry enterprise and then partner with a sports wagering licensee.

While S3692 authorizes athletic event markets, it would prohibit operators from offering markets on catastrophic events, deaths or politics.

The bill cites the 10th Amendment, giving New Jersey "police powers" that are necessary to ensure the health, safety and welfare of state residents. Along those lines, per the proposal, prediction markets have started offering more and more event contracts that allow customers to wager on the outcome of certain events "without regard" for the the state's licensed real money online casino apps or sportsbooks.

As such, the bill aims to rebalance state and federal interests as they relate to prediction markets, which, according to the proposal, "would deprive the State of its ability to protect its citizens" if left wholly unregulated.

The proposed legislation recognizes the overarching federal framework that allowed for prediction markets to launch, including the Commodity Exchange Act and federal law that won't be interfered with, according to the bill. It does, however, look to bring prediction markets in line with what state-regulated operators must adhere to in terms of state rules and regulations.

All of this, the bill reads, is a way for New Jersey lawmakers to better protect state citizens.

That said, New Jersey is still embroiled in a legal battle with leading prediction market operator Kalshi, which received a cease-and-desist letter from the New Jersey Division of Gaming Enforcement but was allowed to continue operating under a preliminary injunction issued by a state judge. The DGE argues that prediction markets like Kalshi do not offer the same levels of consumer protections that licensed sportsbooks and NJ online casinos offer under state law.

This bill, then, would bring prediction markets in line with legal operators in the Garden State and, as emphasized in the proposal, rebalance the landscape.

The latest Kalshi promo code SPORTSLINE10 is good for a $10 cash bonus after $10 in trades and is available in many states. New Jersey offers plenty of online casino games for real money like blackjack, slots, and craps and is one of four real-money online casino states.

Grant Lucas