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Pennsylvania bill imposes fines for insider trading on prediction market exchanges

Legal Writer

Publish Date: Jul 27, 2026

Fact checked by: Matt Moreno

Key Points

Legislation creates fines for people who use non-public information to trade on prediction market exchanges
Fines for prediction market exchanges could reach daily sums of $1 million
Bill also institutes an age requirement and bans certain types of event contracts

A group of 12 Pennsylvania House of Representatives members has signed onto legislation that establishes guardrails around prediction market trading in the state, especially in terms of insider trading. Should the bill become law, Pennsylvania authorities could fine people who use privileged information to buy and sell event contracts on prediction market exchanges up to $1 million per day.

The proposal also imposes a minimum age of 21 for trading, which is higher than the minimum of 18 that most exchange operators maintain. That provision may become a target for litigation, as may other tenets of the bill that target gaming-related markets.

Pennsylvania representatives bring forward bill addressing prediction market insider trading

Pennsylvania Rep. Tarik Khan is the main sponsor of House Bill 2711, but he has 11 co-sponsors from both parties. Lawmakers assigned H.B. 2711 to the Pennsylvania House Committee on Consumer Protection, Technology, and Utilities on July 22.

The legislation defines “material non-public information” as “information that a reasonable prediction market platform user would consider important in opening a speculative position” and “is not publicly available.” The bill clarifies that access to such information could come from a person’s employment or relationships and specifies the offending behavior.

“No person shall, directly or indirectly, knowingly or recklessly, use material nonpublic information or engage in fraudulent or manipulative conduct to obtain a financial benefit through a prediction market, including by: participating in a prediction market in which a person has the ability to influence or control the outcome; providing the information to another person, including through an intermediary or agent, for the purpose of trading or otherwise benefiting from the prediction market.”

The text codifies a progressive fine structure for both traders found to have used material non-public information and the platforms that they traded upon. Repeat violators of the presumed statute could be fined the greater of up to $50,000 per incident or twice the amount of ill-gained profits.

Prediction market exchange operators could face fines of up to $1 million per day if they defy court orders in Pennsylvania that the bill empowers the Pennsylvania attorney general to seek. Other language in the bill could put Pennsylvania officials in court rooms for different reasons.

Age requirements, gaming provision could face challenges

While prediction market operators may not take issue with fines for people who commit insider trading, they may challenge other provisions should H.B 2711 become law. For example, the legislation creates a minimum age for trading event contracts in Pennsylvania of 21.

Most exchanges maintain a minimum age standard of 18, as that’s the minimum that the United States Commodity Futures Trading Commission wrote into its rules for prediction market trading. Operators could argue that Pennsylvania’s law illegally forces them to treat people in the state differently than traders in the rest of the country.

There is a broad passage that could raise operators’ eyebrows as well. It levies a specific ban on trading on that “includes, as a liquidity provider or market maker, a person that knowingly engages in a gaming activity in the ordinary course of business, whether within or outside this Commonwealth or if the prediction market includes a contract or share of revenue with a person or entity who knowingly engages in a gaming activity.”

That word “gaming” could become a matter of contention as it might pertain to sports event contracts. All those concerns will only become material if H.B. 2711 becomes law in its current form, though, but the bipartisan and broad sponsorship in the House is a solid start toward that end.

For more news and updates, head on over to the Ballislife Play page.

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