Pennsylvania Bill Would Regulate Prediction Markets, Allow Sports Event Contracts

Pennsylvania lawmakers are taking a different path than many other states when it comes to prediction markets. Rep. Tarik Khan, D-Philadelphia, introduced House Bill 2711 on July 22, a bipartisan proposal backed by more than two dozen co-sponsors that would create a formal regulatory framework for platforms like Kalshi and Polymarket rather than banning them outright or taxing them into submission.

The bill arrives at a moment when several states have moved to restrict or shut down prediction markets offering sports event contracts, arguing they function as unlicensed sports betting. Pennsylvania is instead proposing consumer protections and integrity rules similar to those already governing its sports betting industry, while notably leaving sports event contracts off the list of prohibited market types.

What HB 2711 Would Actually Require

HB 2711 would add an entirely new Chapter 20, “Prediction Markets,” to Title 4 of the Pennsylvania Consolidated Statutes — the same title that governs the state’s casino and gaming industry. The bill sets the minimum participation age at 21 and requires platforms to maintain exclusion policies covering self-excluded users, employees or agents of the provider, and anyone with access to material nonpublic information that could affect a market’s outcome.

Certain contract types would be banned entirely. The bill prohibits prediction markets tied to high school sports or events involving minors, contracts based on an individual’s health status, and so-called “death markets” covering assassination, attempted killing, or mass casualty events. Operators would also need to implement “commercially reasonable and technically feasible” measures to detect fraud, market manipulation, and misuse of nonpublic information, with separate liability provisions targeting athletes, coaches, public officials, and campaign staff who might try to trade on inside knowledge.

A Firewall Between Prediction Markets and Sportsbooks

The most consequential piece of the bill may be its attempt to separate prediction markets from the traditional gaming industry entirely. Under HB 2711, a provider could not offer a prediction market in Pennsylvania if a gaming business — including affiliates, parent companies, subsidiaries, or joint ventures — acts as a liquidity provider or market maker for it. That provision would likely complicate matters for prediction market platforms tied to licensed sportsbooks such as DraftKings and FanDuel, both of which operate in Pennsylvania.

Enforcement would fall to the Pennsylvania Attorney General and local district attorneys rather than the Pennsylvania Gaming Control Board, a notable departure from how the state regulates its existing sports betting market. Violations could draw civil fines of up to $10,000 per incident, with continuing patterns of noncompliance rising to $50,000, and individual liability infringements potentially reaching $50,000 or twice the profits gained. Providers that keep operating after a court-ordered injunction would face fines of up to $1 million per day.

Notably, HB 2711 does not include a tax on prediction market revenue, setting Pennsylvania apart from states like Kentucky, which has moved to tax online prediction market earnings. The bill was referred to the House Consumer Protection, Technology and Utilities Committee on July 22 and has not yet received a hearing or committee vote.

What Comes Next

HB 2711 is still in its early stages, and its scope could change significantly as it moves — or stalls — through committee. But the bill represents a notable middle path in a national debate where states have largely chosen between banning prediction markets outright or taxing them like traditional gambling products. With sports event contracts continuing to grow in popularity alongside traditional Pennsylvania sportsbooks, how the state ultimately decides to regulate — or restrict — that overlap could influence how other legislatures approach the same question in the months ahead.

For now, Pennsylvania bettors and traders alike are watching to see whether the framework gains traction, or whether the firewall provision aimed at gaming companies becomes a sticking point that slows the bill’s progress through the legislature.