Pennsylvania Wants Gaming Board Control Over Prediction Markets

Pennsylvania lawmakers have introduced HB 2497, a bill that would require prediction market operators to work under state gaming rules before serving users in the state.

Good to Know

• HB 2497 would require prediction market operators to get a Pennsylvania Gaming Control Board license.
• Licenses would cost $1 million upfront and $1 million for each annual renewal.
• The bill would set a 21 age limit and apply a 20% tax on gross revenue.

A group of Democratic lawmakers in Pennsylvania wants prediction markets inside a state-run regulatory system, even though operators already fall under federal Commodity Futures Trading Commission oversight.

House Bill 2497 was introduced Friday and sent to the Gaming Oversight Committee. The proposal argues that Pennsylvania needs its own framework because the CFTC has taken what the bill calls a “noninterference approach” to event outcome prediction wagering.

The bill states:

“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.”

Pennsylvania Wants Licenses, Taxes And Contract Limits

HB 2497 would allow prediction market operators to serve Pennsylvania customers, but only after receiving a license from the Pennsylvania Gaming Control Board.

High Fees

That license would not come cheap. Operators would pay $1 million to enter the market, then another $1 million each year to renew. Any prediction market operator that keeps serving users without approval could face fines of up to $25,000.

Taxes would add another layer. Licensed operators would pay 20% of gross revenue, plus a 2% local share assessment. Revenue from that local share would help fund grants for public interest projects.

The bill also reaches into market conduct. It would ban insider trading on prediction markets and give state gambling regulators power to limit event contracts tied to sensitive topics. Election-related contracts could face restrictions when regulators believe event outcome prediction wagering could affect the election result.

Pennsylvania would also set the legal age for prediction market trading at 21, matching the state age requirement for sports betting.

The harder question sits with enforcement. Prediction market companies operate under federal regulation, and many may resist paying state gaming taxes or accepting state oversight. HB 2497 now needs support in the legislature before it can become law.