Bill Text: NJ S3692 | 2026-2027 | Regular Session | Introduced
Bill Title: Prohibits operation of certain prediction markets in this State; authorizes athletic event markets operating in compliance with sports wagering regulations; establishes public awareness campaign.
Sponsorship: Partisan Bill (Democrat 3)
Status: (Introduced) 2026-02-24 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S3692 Detail]
Download: New_Jersey-2026-S3692-Introduced.html
Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
Senator JOHN F. MCKEON
District 27 (Essex and Passaic)
SYNOPSIS
Prohibits operation of certain prediction markets in this State; authorizes athletic event markets operating in compliance with sports wagering regulations; establishes public awareness campaign.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the operation of prediction markets in this State and supplementing Title 5 and Title 49 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that the 10th Amendment to the United States Constitution reserves to the states those "police powers" necessary to ensure the health, safety, and welfare of their citizens. In accordance with these powers, the State has historically regulated areas which, if left unrestrained, would threaten to undermine the health, safety, and welfare of its citizens, including gambling. Recently, prediction markets, which are licensed and operate under the federal Commodity Exchange Act, have begun offering "events contracts" that allow participants to stake money on the outcome of events, including sports, in what amounts to the functional equivalent of a wager, but without regard for the State's gambling or sports wagering frameworks. This bill provides for the rebalancing of State and federal interests as they relate to prediction markets which, if left wholly unregulated, would deprive the State of its ability to protect its citizens.
2. As used in this act, P.L. , c. (C. ) (pending before the Legislature as this bill):
"Athletic event market" means a prediction market that enables a participant to open a speculative position on the outcome of a sports event, as that term is defined in section 1 of P.L.2018, c.33 (C.5:12A-10), or horse racing, as that term is defined in section 1 of P.L.1940, c.17 (C.5:5-22). "Athletic event market" shall not include the opening of a speculative position on where, when, or whether a sports event or horse race will occur at all.
"Bid-ask format" means a format in which parties submit offers to buy positions at a specific price or range of prices and offers to sell positions at a specific price or range of prices, with market prices determined through the matching of these offers.
"Catastrophic event market" means a prediction market that enables a participant to open a speculative position on an outcome that relates to war, state or national emergencies, natural or human-made disasters, mass shootings, acts of terrorism, or public health crises or the ancillary effects thereof.
"Death market" means a prediction market that enables a participant to open a speculative position on the death, assassination, or attempted killing of a person or group of persons, or on mass casualty events. "Death market" shall not include a prediction market where the outcome could indirectly depend on a death, such as a lawful prediction market which depends on a person engaging in some action where the person's death would naturally make the occurrence of such action impossible.
"Participant" means an individual who is a resident of the State of New Jersey and opens a speculative position on a prediction market.
"Political market" means a prediction market that enables a participant to open a speculative position that relates to an election for federal office in which voters in New Jersey will participate, an election for any State office in New Jersey, including elections for Governor and members of the State Legislature, or an election for a county or municipal office, or school board or fire district, within the State. "Political market" shall not include the opening of a speculative position on when or whether an election will occur at all.
"Prediction market" means a system that allows participants to open a speculative position on the outcome of future events, in a bid-ask format, and in any other form regardless of the mechanisms or structures used for opening speculative positions on future events.
"Prediction market platform" means any platform or service that provides participants with the ability to open speculative positions on the outcome of future events.
"Settlement source" means an entity from which the prediction market platform obtains or sources information for the purpose of determining the outcome of a market.
"Speculative position" means a financial commitment made by a participant in a prediction market.
3. a. Nothing in this act, P.L. , c. (C. ) (pending before the Legislature as this bill), shall be construed to conflict with the "Commodity Exchange Act" (7 U.S.C. s.1 et seq.) or to prohibit a prediction market platform from allowing participants to open a speculative position authorized pursuant to the Commodity Exchange Act or the regulations promulgated thereunder.
b. Each prediction market platform available and operating in this State, to the extent not inconsistent with the Commodity Exchange Act and the regulations promulgated thereunder, shall comply with the provisions of this act, P.L. , c. (C. ) (pending before the Legislature as this bill), and any other applicable State law or regulation.
4. a. Every operator of a prediction market platform in this State shall maintain a comprehensive list of all settlement sources that the operator of the prediction market uses to determine the outcomes of the prediction markets and shall make this list readily accessible to participants.
b. Each prediction market platform shall display the settlement source for a given prediction market on the same page of the Internet website or mobile application from which a participant can open a speculative position on that specific prediction market.
c. No prediction market shall be settled based on proprietary or confidential information.
5. The operator of a prediction market platform shall implement commercially reasonable and technically feasible measures to detect and prevent any fraudulent or manipulative conduct by participants or others, in accordance with such regulations as the Attorney General may prescribe. If the operator detects potential manipulation, insider trading, or fraud in violation of State law, it shall report such conduct to the Attorney General, or the Attorney General's designee for such matters.
6. A prediction market platform shall not allow participants to open a speculative position on catastrophic event markets, death markets, or political markets, consistent with the prohibition set forth in R.S.19:34-24.
7. a. Whenever the Attorney General, or the Attorney General's designee, shall believe from evidence satisfactory to them that the operator of a prediction market has engaged in a persistent course of conduct in violation sections 4 through 6 of this act P.L. , c. (C. ) (pending before the Legislature as this bill), the Attorney General, or the Attorney General's designee, may bring an action in a court of competent jurisdiction seeking to issue an injunction, to enjoin and restrain the continuation of such violation.
b. Whenever the operator of a prediction market continues to operate in the State after an order is issued pursuant to subsection a. of this section, such operator shall incur a civil penalty of $1 million per day that such operator continues in violation of such order.
c. Nothing in this section shall be construed to preclude criminal prosecution arising under any other law.
d. The fact that the operator of a prediction market did not charge money or earn profit from such activities in violation of this section shall not be a defense to a violation.
8. a. The operator of a prediction market may allow participants to open a speculative position on an athletic event market, provided that the prediction market operator either (1) holds a sports wagering license issued pursuant to section 2 of P.L.2018, c.33 (C.5:12A-11), or (2) is licensed as a casino service industry enterprise pursuant to section 92 of P.L.1977, c.110 (C.5:12-92) and has entered into an agreement with a sports wagering licensee for the operation of an online sports pool in accordance with the provisions of P.L.2018, c.33 (C.5:12A-10 et al.).
b. Except as otherwise provided by this act, P.L. , c. (C. ) (pending before the Legislature as this bill), the Division of Gaming Enforcement in the Department of Law and Public Safety shall have the authority to regulate athletic event markets and shall ensure that any operator of an athletic event market complies with the provisions of this act and, to the extent not inconsistent, with the provisions of P.L.2018, c.33 (C.5:12A-10 et al.) and P.L.1977, c.110 (C.5:12-1 et seq.).
c. No prediction market platform shall allow participants to open a speculative position on athletic event markets unless it has produced, to the satisfaction of the division, information, documentation, and assurances concerning its financial background and resources, including cash reserves, that are sufficient to demonstrate that it has the financial stability, integrity, and responsibility to operate an athletic event market.
d. The division shall establish such rules and regulations as shall be necessary for the operation of athletic event markets in this State which, insofar as practicable, shall correspond to the regulatory framework applicable to online sports pools. Such rules and regulations shall include, but need not be limited to:
(1) proper verification procedures to ensure participants meet the minimum age requirements to engage in sports wagering in this State;
(2) acceptance of speculative positions on a series of sports events;
(3) maximum speculative position which may be accepted by an operator from one participant on one sports event;
(4) method of accounting to be used by the operator;
(5) types of records which shall be kept;
(6) reporting of speculative positions open to participants on athletic event market, speculative positions actually opened by participants, and total number of participants on a monthly basis;
(7) use of credit and checks by participants;
(8) provision of promotional credits, incentives, bonuses, complimentaries, or similar benefits designed to induce participants to open a speculative position on an athletic event market; and
(9) adoption of responsible gaming measures by operators, including:
(a) a mechanism by which an individual can voluntarily self-exclude from the platform for a definite or indefinite period;
(b) daily, weekly, or monthly limits on the amount participants can deposit or open in speculative positions;
(c) features that allow participants to limit the amount of time spent on the platform, and periodic notifications that remind participants of how long they have been active and their net winnings and losses during that session; and
(d) display of the words, "If you or someone you know has a gambling problem and wants help, call 1-800 GAMBLER," or some comparable language approved by the division, which language shall include the words "gambling problem" and "call 1-800 GAMBLER," in all print, billboard, sign, online, or broadcast advertisements for an athletic event market.
e. In addition to committing a violation of N.J.S.2C:37-4, any person who allows participants to open a speculative position on an athletic event market without approval of the division is guilty of a crime of the fourth degree and, notwithstanding the provisions of N.J.S.2C:43-3, shall be subject to a fine of not more than $25,000 and, in the case of a person other than a natural person, to a fine of not more than $100,000 and any other appropriate disposition authorized by subsection b. of N.J.S.2C:43-2.
9. The operator of an athletic event market shall maintain and enforce policies to exclude certain participants from opening a speculative position on an athletic event market, including:
any person who is under the age of 21 years;
any person who is excluded from gaming activities pursuant to section 71 of P.L.1977, c.11 (C.5:12-71);
any person who has self-excluded from using the platform or from gaming activities pursuant to section 1 of P.L.2001, c.39 (C.5:12-71.3);
any officer, director, employee, or agent of the operator or its affiliated companies;
any officer, director, employee, or agent of a source settlement provider;
any person who has insider information on a particular market or markets; and
any other category of persons that the division shall, by regulation, designate for exclusion.
10. The sums received by the operator of a prediction market platform derived from speculative positions opened on an athletic event market, less only the total of all sums actually paid out to participants, shall be subject to the same tax applicable to the sums received from Internet wagering on sports events pursuant to section 7 of P.L.2018, c.33 (C.5:12A-16), to be collected by the division and paid to the State General Fund.
11. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the division may adopt, immediately upon filing with the Office of Administrative Law, regulations necessary to implement the provisions of sections 7 through 10 of P.L. , c. (C. ) (pending before the Legislature as this bill), which regulations shall be effective for a period not to exceed 180 days from the date of the filing. The division shall thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
12. a. The Division of Gaming Enforcement shall establish a public awareness campaign to promote awareness among the general public of issues relating to athletic event markets.
b. The public awareness campaign shall include, but need not be limited to, the following subjects:
(1) the legal status of athletic event markets in New Jersey;
(2) the differences between traditional sports wagering and an athletic event market;
(3) types of prediction markets that are prohibited in New Jersey;
(4) the fact that certain types of prediction markets may be regulated by the federal government, that restrictions and the ability to participate in certain prediction markets may vary, and that the fairness and integrity of such prediction markets cannot be guaranteed by the State;
(5) the risks of being defrauded or otherwise losing potentially large amounts of money when opening a speculative position on an athletic event market;
(6) the risks of identity theft when using personal identification or financial information to open a speculative position on an athletic event market
(7) special risks for underage and problem gamblers when opening a speculative position on a prediction market platform;
(8) resources and contact information for participants to report suspicious activity and apparent violations to State and federal regulators; and
(9) access to services for problem gamblers, including contact information for the Council on Compulsive Gambling.
c. The director shall coordinate the efforts of the division with any activities being undertaken by other State agencies to provide information to the public about prediction markets.
d. The director, within the limits of funds available for this purpose, shall seek to utilize both electronic and print media, and may prepare and disseminate such written information as the director deems necessary to accomplish the purposes of this act.
e. The division shall make available electronically on its website, in both English and Spanish, information about prediction markets as described in subsection b. of this section.
f. The director may accept, for the purposes of the public awareness campaign, any special grant of funds, services, or property from the federal government or any of its agencies, or from any foundation, organization or other entity.
g. The director shall report to the Governor and to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no later than 18 months after the effective date of this act, on the activities and accomplishments of the public awareness campaign.
13. This act shall take effect 30 days following the date of enactment, except that the Attorney General and the Division of Gaming Enforcement shall be authorized to take such anticipatory administrative action as may be necessary for the implementation of this act.
STATEMENT
This bill prohibits the operation of certain prediction markets in this State and authorizes the operation of athletic event markets operating in compliance with sports wagering regulations. Prediction markets offer participants the ability to purchase "events contracts" which pay out if the participant has predicted the correct outcome of the event. In effect, prediction markets enable people to wager on everything from sports to elections to world events, all while avoiding State regulations because they are packaged and sold as federally regulated securities.
The bill, in recognition of the overarching federal framework, creates three distinct areas of State regulation: 1) that which is governed explicitly by the Commodity Exchange Act and federal law, which the State will not interfere with; 2) that which is contrary to longstanding public policy and should be prohibited outright; and 3) that which has traditionally been regulated by the State and may be allowed in conformity with applicable State regulations. As the case law related to the Commodity Exchange Act evolves, the limitations applicable to State regulation may change; however, this bill directly acknowledges the federal framework, establishes basic standards for the operation of prediction markets that the State can and should implement to protect its citizens, and empowers State regulators with the tools and authority necessary to respond if and when the applicable federal limitations change.
The bill requires all prediction markets to meet basic standards, including that the prediction markets disclose the source of information used to settle a market and take practical steps to limit potential manipulation, insider trading, or fraud in violation of State law.
This bill also prohibits prediction markets that allow participants to effectively wager on death markets, catastrophic event markets, and political markets.
The bill authorizes the State Attorney General to petition the court for an injunction to stop any operation of a prediction market that violates these basic requirements. Operators who refuse to comply with an injunction issued pursuant to this bill will be fined $1 million per day that the operation continues.
The bill also regulates athletic event markets in the same manner as sports wagering. This includes requiring any operator of an athletic event market to either obtain a sports wagering license, or become licensed as a casino service industry enterprise and partner with a sports wagering licensee. Athletic event markets will also require a minimum age of 21 years to participate, establish self-exclusion and responsible gaming programs, and pay taxes at an equivalent rate to online sports pools. The Division of Gaming Enforcement will be tasked with the oversight of athletic event markets. Any person who operates an athletic event market without approval of the division will be guilty of a crime of the fourth degree will be subject to a fine of not more than $25,000 and, in the case of a person other than a natural person, to a fine of not more than $100,000.
The bill requires the Division of Gaming Enforcement to establishe a public awareness campaign to inform citizens of this State about the various types of prediction markets which may be operating in the State, the risks of opening a speculative position on a prediction market, contact information for reporting suspicious activity to regulators, and resources for problem gamblers.
As defined in the bill:
"Prediction market" means a system that allows participants to open a speculative position on the outcome of future events, in a bid-ask format.
"Athletic event market" means a prediction market that enables a participant to open a speculative position on the outcome of a sports event or horse racing.
"Catastrophic event market" means a prediction market that enables a participant to open a speculative position on an outcome that relates to war, state or national emergencies, natural or human-made disasters, mass shootings, acts of terrorism, or public health crises or the ancillary effects thereof.
"Death market" means a prediction market that enables a participant to open a speculative position on the death, assassination, or attempted killing of a person or group of persons, or on mass casualty events.
"Political market" means a prediction market that enables a participant to open a speculative position that relates to an election for federal office in which voters in New Jersey will participate, an election for any State office in New Jersey, including elections for Governor and members of the State Legislature, or an election for a county or municipal office, or school board or fire district, within the State.
