NASHVILLE, Tenn. (WTVF) — Tennessee lawmakers are considering a bill that would make it a crime if individuals profit from prediction markets and they also helped influence the outcome of the event.
Prediction markets operate similarly to online sports gambling. There are plenty of bets to put money on. But unlike sports gambling, the topics of the wager can range between sports, politics, economics, and even cultural events like who is going to win Season 50 of Survivor on CBS? The big players are Polymarket and Kalshi.
They're growing in popularity, but State Senator Ferrell Haile (R-Gallatin) is worried the system is too easy to abuse. He brought up the famous case of a man who bet on the prediction market website Kalshi that someone would streak at this year's Super Bowl. He won the wager because he did the streaking himself. "He placed that wager and then he was the one that ran out on the field, causing the event to take place," said Haile.
Haile's legislation would make swaying the outcome and making money off of a bet a Class E felony in Tennessee. It advanced out of the Senate Judiciary committee nearly unanimously, with only State Sen. London Lamar declining to vote one way or another. It could go to a full Senate floor vote as early as next week.
Regulatory Fight Ahead
This bill raises another question — how much control should the state have over these emerging prediction markets? States currently have control over online sports gambling companies, which has become a billion-dollar industry in Tennessee. But as of right now, prediction market regulation is at the federal level.
Many believe the ultimate regulatory decision will be made by the US Supreme Court.
Many states may also explore ways to make tax revenue from predictive markets. Currently, Tennessee doesn't make any tax revenue from prediction markets. Online sports betting, on the other hand, has made the state millions in tax revenue.
Do you have more information about this story? You can email me at Chris.Davis@NewsChannel5.com.
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