On July 22, Pennsylvania lawmakers introduced House Bill 2711, which could shut gambling companies out of providing liquidity or acting as market makers for prediction markets in the state. The bipartisan bill, sponsored by 24 representatives, aims to impose insider trading rules and consumer protections but explicitly bars gambling operators from supplying liquidity to these markets.
The legislation prohibits platforms from offering prediction markets if their liquidity providers or market makers engage in gaming activities, whether inside Pennsylvania or elsewhere. This ban also extends to a broad network of related entities including subsidiaries, affiliates, joint ventures, and employees linked to gambling companies. plus prediction platforms would be forbidden from entering revenue-sharing contracts with businesses that conduct gaming as a routine activity.
Interestingly, the bill does not precisely define “gaming activity” or clarify how it would affect platforms connected to sportsbooks, creating uncertainty about how courts or regulators might enforce these rules. This development comes as major sportsbook operators like DraftKings and Flutter advance into market-making roles and expand beyond traditional consumer-facing betting apps. DraftKings recently launched its DKeX exchange after acquiring Railbird Technologies, a move that puts its market-making ambitions front and center.
If adopted and broadly applied, HB 2711 could prevent sportsbook-affiliated market makers from supporting prediction contracts for Pennsylvania residents. It may also complicate existing partnerships where prediction exchanges share revenue with casinos or gambling subsidiaries. Unlike some other states considering outright bans, this Pennsylvania bill focuses on restricting liquidity provision rather than prohibiting prediction markets entirely.
Additional provisions in the bill set a minimum platform user age of 21 and assign enforcement authority to the state Attorney General. There is also a companion bill proposing licensing requirements and a combined tax rate of 22% on relevant revenues.
