Prediction markets face a regulatory reckoning as global pressure ramps up.

US authorities and lawmakers are tightening scrutiny on prediction markets, while the UK’s major tax hike signals a tougher operating environment. Enforcement is accelerating across US states, and international regulators are stepping in, even as new markets move toward regulation.

Let’s dive into this week’s Regulation Roundup

Tax Issues

• Federal prosecutors probe prediction market insider trading
  
  Federal prosecutors in Manhattan met with Polymarket representatives to discuss whether certain trades may have violated insider trading laws, according to CNN. The Southern District of New York's securities and commodities fraud unit is examining well-timed bets tied to the Iran war and the capture of Venezuela's president Nicolas Maduro. No charges have been filed. 

• Wave of new federal legislation targets prediction markets
  
  Senator Jeff Merkley (D-OR) introduced the STOP Corrupt Bets Act on March 26, a sweeping bill that would ban event contracts on elections, sports, government actions and military operations, with a House companion filed by Rep. Jamie Raskin (D-MD). Separately, a bipartisan group of four senators including Schiff (D-CA) and Curtis (R-UT) introduced the Public Integrity in Financial Markets Act, barring the president, members of Congress, their staff and political appointees from trading on prediction markets using insider information. Schiff and Curtis also reaffirmed their push for the Prediction Markets Are Gambling Act, calling voluntary self-policing by Kalshi and Polymarket insufficient.

Legislative Hikes

• UK Remote Gaming Duty doubles to 40% from April 1
  
  The UK's Remote Gaming Duty increase from 21% to 40% takes effect on April 1, 2026, the most significant UK gambling tax change in recent history. The measure is expected to raise over 1 billion pounds annually. Entain has warned investors of an earnings hit of between 100 million and 150 million pounds across 2026 and 2027. Major operators including 888poker, bet365 and PokerStars have indicated they will not immediately exit the market or adjust player-facing terms, though analysts warn smaller white-label operations may exit by summer.

Enforcement and Compliance

• Maine House passes sweepstakes casino ban, awaits governor
  
  Maine's House of Representatives passed LD 2007 on March 26 by an 88-55 vote, prohibiting online sweepstakes games in the state. The bill now awaits action from Governor Janet Mills, who has 10 days to sign or veto. Maine is on the verge of becoming the second state after Indiana to enact a sweepstakes casino ban in 2026.

• Maryland House passes two sweepstakes enforcement bills
  
  The Maryland House passed HB 295, creating criminal prohibitions on dual-currency online sweepstakes simulating casino gaming, and HB 1226, an enforcement bill granting regulators expanded authority including cease-and-desist powers and payment blocking. Both bills are scheduled for Senate hearings.

• Louisiana and Minnesota advance sweepstakes restrictions
  
  Louisiana's HB 53, a racketeering bill classifying 'Gambling by computer' and 'Gambling by electronic sweepstakes device' as criminal offenses, was scheduled for House floor debate on March 30. In Minnesota, SF 4474, which would ban dual-currency sweepstakes casinos effective August 1, 2026, cleared two Senate committees in quick succession, following prior formal warnings by Attorney General Keith Ellison to non-compliant operators.

Emerging Markets

• New Zealand Online Casino Gambling Bill reaches final parliamentary stage
  
  New Zealand's Online Casino Gambling Bill passed the Committee of the Whole House and advanced to its third and final reading, where Parliament will vote on whether to pass the legislation for Royal Assent. Regulation finalisation is expected in early June 2026, with a market launch scheduled for December 1 and up to 15 licences to be auctioned. Entain has signalled it will seek three licences, while SkyCity Entertainment Group has also expressed interest.

• Prediction markets face mounting international regulatory pressure
  
  Prediction market platforms face legal or regulatory challenges across more than a dozen jurisdictions including the UK, France, Germany, Italy, Australia, Singapore, Portugal, Hungary, Thailand and the Netherlands, in addition to mounting US state actions. The UK Gambling Commission has indicated prediction markets would require a UKGC licence to operate in Britain. The sector grew from $1.2 billion in monthly activity in early 2025 to more than $20 billion by early 2026, according to TRM Labs, fuelling a parallel increase in international enforcement responses.

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