A bipartisan Pennsylvania bill would impose insider-trading rules and consumer protections on prediction markets while blocking gambling companies from supplying their liquidity. The restriction could disrupt market-making strategies pursued by Draftkings, Flutter and other sportsbook groups expanding into federally regulated event contracts.
Key Takeaways
HB 2711 would bar gambling companies from serving as prediction-market makers.The bill sets a 21+ age limit and hands enforcement to the Attorney General.A companion bill would license platforms and tax revenue at a combined 22%.The bill would prohibit a provider from offering a prediction market in Pennsylvania when its liquidity provider or market maker knowingly conducts gaming activity in the ordinary course of business, whether inside or outside the commonwealth. The restriction extends to parents, subsidiaries, affiliates, joint ventures, employees and entities acting for another company’s financial benefit.
Prediction platforms would also be barred from entering contracts or sharing revenue with businesses that ordinarily engage in gaming. The bill does not define “gaming activity” within its new prediction-market chapter, and does not specify how the provisions would apply to platforms affiliated with sportsbook operators, leaving uncertainty over how broadly courts or regulators would apply the restriction.
If enacted and applied broadly, HB 2711 could stop sportsbook-controlled market makers from supporting contracts offered to Pennsylvania residents. It could also complicate partnerships in which a prediction exchange shares revenue with a casino, sportsbook or gambling-company affiliate. And, unlike proposals advanced in several other states, it treats prediction markets as an activity to regulate rather than prohibit. This places the liquidity restriction rather than an outright ban at the center of its constraint on gambling operators.
The bill would establish a minimum age of 21 and require platforms to exclude self-excluded users, company employees, settlement-source employees and people possessing inside information. Providers would need commercially reasonable safeguards against fraud, manipulation and the misuse of material nonpublic information. It would also prohibit markets involving high-school sports, sporting events with minor participants, individual health conditions, and what it defines as “death markets” – contracts tied to a person’s death, assassination, attempted killing or mass-casualty events. Athletes, coaches, officials, candidates, campaign workers and others able to influence an outcome could face liability for trading on related contracts.
The combined 22% rate would sit well below what Pennsylvania already charges its licensed operators, who pay 36% on sports wagering revenue and 54% on online slots – among the highest rates in the country. Burgos has framed the bill around what he calls regulatory arbitrage, arguing platforms claiming to offer financial derivatives rather than gaming products bypass safeguards built for casinos and sportsbooks.
The two measures emerged from parallel tracks rather than as rivals: Burgos circulated a licensing-and-tax memo in March, while Khan filed his insider-trading proposal in late April. Khan co-sponsors both, and contemporaneous coverage has described them as companion measures – HB 2497 treating event contracts as state-regulated wagering, HB 2711 layering conduct and consumer-protection rules on top.
Neither Pennsylvania bill has received a committee vote or hearing. HB 2711 nevertheless adds a new fault line to the national fight: states may not only challenge whether prediction markets can operate, but also attempt to separate their trading infrastructure from the gambling companies increasingly seeking to control it.
