Committee Chair Floats Possible Prediction Markets Legislation

United States Rep. Dusty Johnson recognizes that prediction markets legislation might be the best solution to a thorny issue. Whether a bill can get through Congress is another matter.

Johnson (R-S.D.), the chair of Congress’ Commodity Markets, Digital Assets and Rural Development committee, floated possible legislation regarding the legality of prediction markets. Currently, prediction markets operate in between federal and state oversight, as both governments believe they should make the decisions regarding prediction markets’ legality.

In a potential blow to prediction markets’ legality, Johnson suggested that new legislation might be needed.

“Part of that, I mean the Commodities Exchange Act was written in 1934," Johnson said in an interview with South Dakota Public Broadcasting. "So, it is a pretty good piece of work but has not kept pace with all of the evolutions that have happened in almost 100 years.”

That’s included things such as legalized gambling and the ability to trade instantly. When event contracts initially started, trading them was a long-term play. Investors could trade against things such as crops, oil and gold that took weeks or months to play out.

With the rise of the internet, trading has become an instant affair. The rise of Kalshi and Polymarket have further complicated things, as both have entered into what has traditionally been recognized as sports betting.

What Needs to Happen Regarding Prediction Markets Legislation?

Johnson suggested that he might put out a bill, but acknowledged it will be a tough fight. In order to get real prediction markets legislation passed in the next three years, Congress likely needs a bill that can get two-thirds of both the House and the Senate to agree.

That’s because United States president Donald Trump has taken a unique approach to prediction markets. His position has ranged from laissez-faire to open support. If prediction markets legislation reins in the platforms, Trump is likely to veto the legislation.

Johnson isn’t even thinking about that hurdle yet. He’s more concerned about getting legislation through the Senate, where the filibuster looms. To break a filibuster, at least 60 senators have to vote yes.

“I think it’s a really difficult path. I’m in the process of drafting legislation, it may be that I’ll be in a position to release that," Johnson said. "But if I’m being honest, I think it is going to be really hard to find a product that could get 60 votes in the United States Senate. This is a highly controversial issue.”

How Likely Is Legislation?

Despite Johnson’s concerns, this could be an area where Congress finds common ground. In July, 44 of the state attorneys general said the Commodity Futures Trading Commission has no authority over sports gambling. The attorneys general believe that belongs at the state level, not the federal level.

If prediction markets legislation isn’t accomplished, the issue will almost certainly arrive at the Supreme Court. That’s far more of a question mark, given that federal courts have ruled both for and against prediction markets.

While Congress could wait out Trump, who is term-limited, it’s likely the courts will not wait that long. It’s likely Johnson will try to get prediction markets legislation to the floor in some form in 2027.