Congressman Josh Gottheimer is spearheading an initiative to mandate that prediction markets and online sportsbooks verify that their users are of legal age through facial recognition technology. This effort coincides with concerns over the accessibility of gambling and trading platforms to individuals under 18.
On Wednesday, Gottheimer (D-NJ) unveiled the Facial Recognition to Protect Children Act, which would require licensed online sports betting operators and prediction markets to implement facial recognition systems for age verification.
The introduction of the bipartisan bill comes following data from Common Sense Media, which indicates that approximately 40% of boys aged 14 to 17 have gambled in the past year. Gottheimer expressed his concerns about the current system, emphasizing its flaws:
"We’re asking our kids to self-police their way past a system built entirely on the honor code. A kid can log into a parent’s, an older sibling’s, or a friend’s account and place a bet with no verification at all. Nobody checks. That’s it. That’s the whole system. We wouldn’t accept that at a casino in Las Vegas. We shouldn’t accept it on the phone in our kid’s back pocket,” he stated when presenting the proposal.
The proposed legislation takes significant steps to enhance child protection in the realm of online gambling. It necessitates that sportsbooks and prediction markets utilize facial recognition technology at login or prior to placing a bet, ensuring the technology assesses facial structures to estimate user ages without gathering biometric data. Moreover, the bill stipulates that the facial recognition systems must not retain users' identity information.
Gottheimer's initiative has gained support from Kalshi, a prediction market platform. The company's CEO, Tarek Mansour, co-introduced the bill alongside Gottheimer. Additionally, ParentsRISE, a national organization advocating for parents who have lost children due to the negative impacts of social media, is backing the act.
Lawmakers, including Rep. Ritchie Torres, have echoed their support for the bill, emphasizing the need for stringent age verification in rapidly expanding gambling markets. “Online gambling and prediction markets are expanding rapidly, but our guardrails to protect minors haven’t kept pace. Right now, the honor system is failing our kids, allowing underage users to bypass basic age restrictions with zero accountability,” Torres remarked. He further stated, “By implementing proven facial recognition technology, we can safeguard children from the risks of underage gambling while protecting user privacy.”
In addition to Torres, the bill has also received support from Representatives Van Drew, Kristen McDonald Rivet, Jimmy Panetta, Darren Soto, Tom Souzzi, and Bruce Westerman.
Gottheimer is actively pursuing other legislative measures aimed at protecting youth, including the Parents Decide Act, which mandates that technology companies verify a user’s age when a device is initially set up.
Interest in prediction markets regulations is growing, with Torres previously introducing the Public Integrity in Financial Prediction Markets Act, which seeks to prohibit federal officials from trading event contracts related to government policies. This bill, introduced in January, has yet to progress.
Several states are also taking action to curtail governmental trading practices. In March, California Governor Gavin Newsom issued an executive order banning state officials from using or sharing nonpublic information for insider trading, affecting both stock and prediction markets. Similarly, Arizona Governor Katie Hobbs recently enforced an executive order prohibiting executive branch employees from disclosing or using confidential government information in their trading activity.
