Pennsylvania Bill Would Regulate Prediction Markets Without Taxing or Licensing Them
HB 2711 would add consumer safeguards for sports event contracts in Pennsylvania, but skips licensing or taxation as Kalshi fights states in court.
This article was produced with AI assistance and edited by the ON360 newsroom.
Pennsylvania lawmakers have introduced a bill that would bring consumer-protection rules to sports event contracts sold by prediction market platforms such as Kalshi and Polymarket — without licensing the operators or taxing their revenue, according to Gambling Insider. HB 2711, sponsored by Philadelphia Democrat Rep. Tarik Khan, has bipartisan support but remains stalled in a House committee even as Kalshi keeps losing legal battles with state regulators elsewhere.
The bill would fold new guardrails into Title 4 of the Pennsylvania Consolidated Statutes, the same law that governs the state’s existing sports betting and casino industry. It would set a minimum age of 21, require insider-trading protocols, and ban political contracts tied to events such as assassinations or deaths — categories that have already drawn fire from regulators and politicians in other states.
Oversight would sit with the attorney general, not gaming regulators
Rather than routing prediction markets through the Pennsylvania Gaming Control Board, HB 2711 would place oversight with the state attorney general. That marks a notable departure from an earlier bill, HB 2497, introduced in May, which would have required state licensure for prediction markets and taxed gross revenue at 22 per cent, compared with 36 per cent on regulated sports betting.
HB 2711 also contains a provision that could unsettle the two dominant U.S. sportsbook operators. It would bar companies from offering prediction markets in Pennsylvania if any part of their business — including affiliates or subsidiaries — acts as a liquidity provider on that platform. FanDuel and DraftKings, which together control the bulk of the U.S. sports betting market, both launched prediction-market products this year and both serve as market makers on their own platforms.
Doug Mishkin, an attorney with BCLP’s Sports, Entertainment & Media practice, told Gambling Insider the intent behind that clause is unclear even as he called the broader concept a reasonable starting point. “Avoiding the legal debate as to whether these are swaps or this is sports betting, the underlying activity being risking money based on sports-related predictions is so hugely popular in the U.S.,” Mishkin said, adding that regulating and licensing the sector — as happened with daily fantasy sports and sports betting — “is, I think, the most principled approach to something that is going to be happening at scale anyway, whether it’s legal or not.”
On the liquidity-provider restriction specifically, Mishkin said he was “perplexed,” noting it seems aimed at keeping licensed sportsbook operators separate from prediction markets even though “it’s not clear to me where that ultimately gets you,” since the same conflict-of-interest logic could apply to any entity entering the space.
Bill lands amid a losing streak for Kalshi
The bill’s timing has puzzled industry observers, arriving as several states rack up legal wins against Kalshi over whether its sports event contracts amount to unlicensed sports betting. The federal Commodity Futures Trading Commission has continued to back the exchange, however. Last week the CFTC invoked emergency authority to tell Kalshi to disregard a cease-and-desist order issued in New York, following a similar move in July when it ordered Kalshi to keep honouring sports contracts after a Michigan court directed the platform to unwind them.
HB 2711 would not touch that federal-state jurisdictional fight, and as written could arguably ease pressure on Kalshi rather than add to it. The bill remains before the Pennsylvania House Consumer Protection, Technology and Utilities Committee, with no scheduled vote.
For Canadian readers, the fight illustrates the regulatory uncertainty still surrounding prediction markets south of the border — a contrast with Ontario’s regulated iGaming model, where operators must be licensed by the AGCO and registered with iGaming Ontario, and must offer responsible-gambling tools such as deposit limits and self-exclusion. Anyone concerned about their gambling can contact ConnexOntario at 1-866-531-2600 for free, confidential support.
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