In July 2010, US Senator Blanche Lincoln (D-Ark.) predicted the rise of prediction markets and the problems they could cause. If not properly regulated, Lincoln warned during Senate proceedings on the Dodd–Frank Wall Street Reform and Consumer Protection Act, prediction markets could evade gambling laws by offering "event contracts" that let people place wagers on sports games.
"It would be quite easy to construct an event contract around sporting events such as the Super Bowl, the Kentucky Derby, and Masters golf tournament," Lincoln, who played a key role in making the law that now regulates prediction markets, told fellow senators. "These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling."
