Ahead of the start of the new legislative session in January, Texas Democrat Rep. Salman Bhojani pre-filed legislation that, if passed, would raise the minimum age for trading on prediction markets in the state to 21 years old.
The early filing of Bhojani’s H.B. 598 arrives as some of his colleagues have pre-filed a spate of wagering-related legislation following a blue wave in last Tuesday’s midterm elections. Now that Democrats control the Texas State House and all of the major statewide offices, there’s optimism that the second-most populous state will embrace various forms of gaming expansion.
As for Bhojani’s prediction market bill, the effort to move Texas’s minimum trading age to 21 would put the state in line with wagering laws seen in most states and it’d eliminate the 18 and up requirement employed across the country by some of the largest prediction market operators.
“An operator may not permit an individual physically located in this state who is younger than 21 years of age to purchase, sell, trade, or enter into an event contract through a prediction market,” according to text of Bhojani’s proposal.
Fanatics and Novig are among the well-known prediction market firms with 21 and up mandates.
More Details on the Bhojani Bill
H.B. 598 requires prediction operators to employ know your customer (KYC) protocols to verify clients’ identities “using a commercial age verification system that verifies age using” government-issued identification or another “commercially reasonable method.”
The Bhojani bill emerges just months after the Texas Medical Association (TMA) advocated for raising the state’s prediction market age to 21, noting that teenagers may be vulnerable to adopting problematic wagering habits by way of the high-speed thrills offered by yes/no exchanges.
The physicians association also said the state should consider banning prediction market advertising near school grounds and on social media platforms known to be frequented by teenagers. Bhojani’s legislation takes up that mantle, proposing bans on yes/no exchange advertising near primary and secondary schools while mandating that operators make clear that the minimum trading age is 21 (assuming his bill is signed into law).
Prior to the midterm election, Texas policymakers noted that the issue of prediction markets, in some form, would be examined this year. Now, there’s more momentum for added scrutiny on the industry with much of it at the national level where Democrats will have deep majorities in both chambers of Congress come January.
Bhojani Bill Proposes Lots of Bans
Bhojani’s legislation doesn’t take aim at sports event contracts, which are the sources of the industry’s legal woes in a slew of other states. But he is pitching civil penalties for operators allowing trading in a number of unsavory categories.
Those include criminal investigations, deaths of individuals, executions, legal outcomes, terrorism and acts of war, among others.
Democrats control the Texas State House while Republicans control the State Senate, but Gov.-elect Gina Hinojosa is a Democrat, indicating that if H.B. 598 makes its way to her desk, it’ll be signed into law.
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