Protecting consumers from fraud and manipulation

(a) Prevention of insider trading and conflicts of interest An individual or operator of an online prediction market shall not— (1) use material, nonpublic information for private gain in wagering on an online prediction market; or (2) create or participate in listings or wagers on an online prediction market that would present a conflict of interest. (b) Prevention of manipulation An individual or operator of an online prediction market shall not engage in manipulation and deceptive practices that predetermine the outcome or otherwise materially interfere with the integrity and execution of listings on an online prediction market. (c) Restricting fraudulent listings An operator of an online prediction market shall not offer listings that— (1) are susceptible to manipulation or fraudulent activities; (2) relate to war, military action, or death; (3) violate State or Federal law; or (4) relate to other matters that are contrary to the public interest as determined by the Attorney General and established under the rules issued pursuant to subsection (e). (d) Ensuring clear resolution of wagers Each operator of an online prediction market shall— (1) ensure all listings clearly and conspicuously state the conditions under which the resolution of any wager will be decided; (2) be responsible for determining when a listing has been resolved; and (3) promptly remove listings that violate the provisions of this section. (e) Required rules of online prediction markets Each operator of an online prediction market shall— (1) develop and publish rules for use of the online prediction market that prohibit any use of the online prediction market— (A) in violation of subsections (a) and (b); or (B) that would otherwise constitute a prohibited transaction described in section 4c of the Commodity Exchange Act (7 U.S.C. 6c); and (2) enforce the rules developed under paragraph (1) of this subsection with respect to the users of the online prediction market. (f) Rulemaking Not later than 180 days after the date of enactment of this Act, the Attorney General shall issue rules to implement the provisions of this section, including defining the term material, nonpublic information for purposes of subsection (a)(1).