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Facial scan age verification bill is shrouded gift to prediction market exchanges

Legal Writer

Publish Date: Jul 24, 2026

Fact checked by: Matt Moreno

Key Points

Rep. Josh Gottheimer has presented bill as a requirement for prediction market and gambling apps/websites to use facial scans to estimate users’ ages
Utility of the technology to verify users’ ages is questionable in some circumstances
Legislation includes language that directly addresses questions of law in disputes over sports event contracts

A commonly used tactic to sell legislation that is undoubtedly a gift to one faction on an issue is to tie it into a separate issue so proponents can use “we’re protecting children” as the cover. By doing so, proponents of the legislation who hope others won’t actually read the bill too closely can counter any opposition by accusing the opposition of desiring to see children continue to face danger.

Much of the text of Rep. Josh Gottheimer’s (Democrat, New Jersey-5) bill indeed involves rules around the use of facial scans to estimate app and website users’ ages. However, there is a potent section that amends part of the Commodity Exchange Act in a way that gives added flexibility to federal governmental agencies that regulate event contract trading in a way that could make it harder for state and tribal governments to challenge the legality of such trading.

(Photo illustration by Cheng Xin/Getty Images)

Surprising no one, Gottheimer has clear financial ties to corporations involved in the prediction market exchange industry. While the measure could prevent some gambling and trading by people who are underage in the long run should it become law, the larger effect is exactly what those parties invested in the prediction market exchange industry paid for.

Gottheimer announces “Facial Recognition to Protect Children Act”

Josh Gottheimer’s office published a release about the new legislation on Wednesday, which the statement says will require “prediction markets and online sportsbooks to use facial recognition technology to verify a user’s age before they can place a bet or trade.” The bill is H.B. 9706.

The text of the bill reads that a “wagering operator or a prediction market platform operator may not permit a user to access a wagering or prediction market platform under the control of the wagering operator or the prediction market platform operator, or accept a wager, in the case of a wagering operator, or place an order, in the case of a prediction market operator, from such user, that the wagering operator or the prediction market platform operator has not verified, using commercially available facial recognition technology, has attained more than 18 years of age.”

Experts on the use of facial scans in this regard say that facial scans can be useful in estimating the age of individuals. However, there are limitations, and those limitations may ironically affect the highest area of need.

Facial scans face limits in terms of age estimation

Facial scans can provide consistently reliable results in discerning an age range and filtering out scan data that clearly does not fit the expected parameters for an age range. However, the comprehension and technological faults in the policy become quickly evident.

For starters, the very name of Gottheimer’s bill invoking facial “recognition” is faulty. Niclas Braun, Founder and CEO of 4SI, explains that facial recognition involves recognizing whether a person’s face matches the stored data for who that person is presenting themselves as, not whether a face fits the expected parameters for a specific age.

Additionally, verifying a person’s age-based eligibility on a granular level of individual years (i.e. 17 vs. 18) is still beyond the reliable capability of facial scan technology.

“Facial age estimation has improved, but it is not deterministic,” added Braun. “Accuracy depends on the algorithm, image quality, demographics and most importantly the distance between the estimated age and the legal threshold. Someone close to 18 or 21 is inherently harder to classify than someone clearly above or below it.”

“Age estimation is easiest at the extremes and hardest in exactly the band this bill cares about,” commented Julian Gage, Founder of Engage Compliance. “A model can separate a 12-year-old from a 30-year-old easily but separating a 17-year-old from a 19-year-old is close to the limit of what a face can tell you, because the face changes slowly through that period and the variation between individuals is larger than the variation the model is trying to detect.”

Gage explains that app and website designers can set thresholds conservatively, so that errors will be made on the side of people who satisfy the age minimum being incorrectly flagged as too young. Such individuals could use documentation to prove their age.

The potential efficacy of facial scans for age verification aside, Gottheimer’s legislation features a section that is almost gift-wrapped for prediction market exchanges locked in legal disputes with state and tribal governments.

Lawsuits center on CEA and legal definition of event contracts

Numerous state and tribal governments have taken actions against prediction market exchanges, especially in relation to trading sports event contracts on the platforms. At the center of those disputes is the U.S. Commodity Exchange Act (CEA).

The CEA governs event contract trading and H.R. 9706 features some amendments to that law. One section that would be new to the CEA would explicitly strengthen federal regulators’ ability to approve event contracts that emulate gambling.

“In connection with the listing of event contracts by a designated contract market or swap execution facility, the Commission, on a case-by-case basis, may determine that an event contract is contrary to the public interest if the event contract is based on an occurrence, extent of an occurrence, or contingency involving activity that is unlawful under any Federal or State law; terrorism; assassination; war; violence; gaming; or other similar activity determined by the Commission to be contrary to the public interest.”

Writing this tenet into law would affect the question of Congressional intent behind the CEA’s language, a key argument in many lawsuits over event contract trading. Essentially, this language would clearly signal to courts that Congress indeed empowered federal regulators to be the sole arbiters of whether gambling-related event contracts should be listed on exchanges.

Gottheimer’s release mentions that the bill has the support of Kalshi and Kalshi CEO Tarek Mansour was present at Gottheimer’s press conference announcing the legislation. Based on this section, it’s not difficult to see why, but Kalshi supporting H.R. 9706 is also poignant because companies invested in Kalshi and its industry at large support Gottheimer.

Gottheimer’s campaign war chest seems intent on eliciting favors

Gottheimer is facing reelection in November, and has been one of the most successful fundraisers in this cycle. Joey Fox of the New Jersey Globe reports that his campaign for a sixth consecutive term representing New Jersey’s fifth congressional district has raised more money than any other New Jersey congressional candidate, with over $11 million in contributions through the first quarter of 2026.

The influx of political capital isn’t easily explained by Gottheimer being locked in a tight race that could cost the Democratic Party a seat in the House, as Polling Source lists Gottheimer’s seat as “safe.” Rather, it seems that the donors are actually investors in Gottheimer’s work in Congress.

Donors with obvious ties to prediction market industry figure prominently among Gottheimer’s supporters

Coinbase, which runs its own prediction market exchange, has accounted for over $18,000 to Gottheimer’s bid for a sixth term according to OpenSecrets. Morgan Stanley, which is a significant Kalshi investor, has contributed $10,000 to Gottheimer’s campaign according to Plain Interest.

H.R. 9706 is an attempt to tip the scales toward prediction market exchanges in current litigation and to safeguard the exchange operators from having to spend money on defending themselves against lawsuits in the future that is so thinly veiled that it’s cartoonish. The great irony of Gottheimer’s bill is that for as much as it touts itself as a safeguard against young people shrouding themselves to gamble illegally, Gottheimer is equally trying to shroud the “kickback” he is giving to his donors.

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