US lawmakers introduced bipartisan legislation to prohibit the president, vice president, members of Congress and certain federal appointees from betting on prediction markets tied to political events, policy decisions and other government actions.
Reps. Adrian Smith and Nikki Budzinski filed the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act). Budzinski said recent large profits by obscure traders on outcomes ranging from a potential war with Iran to the length of a government shutdown raise questions about the use of inside information and the need to close loopholes so those with private knowledge “cannot profit from it.”
The PREDICT Act would extend the ban to spouses and dependents and impose penalties including a 10% fine on the total value of any offending contract and disgorgement of profits to the U.S. Treasury.
The bill arrives amid heightened scrutiny of prediction markets such as Kalshi and Polymarket over contracts tied to sports, conflict and politics. Earlier this month, two Democratic lawmakers introduced the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act; Sen. Chris Murphy suggested bets on U.S. military actions involving Iran likely reflected use of inside information.
States have also acted: Cointelegraph reported 11 states pursuing legal action against prediction markets, with two more states preparing cases. At the federal level, Sens. John Curtis and Adam Schiff introduced bipartisan legislation to bar Commodity Futures Trading Commission (CFTC)-registered entities from listing contracts that look like sports bets or casino-style games. The senators criticized the CFTC for backing away from long-standing enforcement against contracts tied to “gaming,” saying the agency has abruptly reversed course by intervening in litigation and moving to relax enforcement.
In response to concerns about improper participants and insider trading, major platforms including Kalshi and Polymarket have tightened rules to restrict professional athletes, political candidates and other potentially problematic users from certain markets.
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