Bipartisan legislation was introduced to bar the president, vice president, members of Congress and certain federal appointees from placing bets on prediction markets tied to political events, policy decisions and other government actions.
Representatives Adrian Smith and Nikki Budzinski filed the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act). Sponsors say the measure responds to recent large profits by obscure traders on outcomes such as a potential war with Iran and the length of a government shutdown, which they say raise concerns about the use of inside information and loopholes that could let officials profit from privileged knowledge. The bill would extend the prohibition to spouses and dependents.
Penalties proposed by the PREDICT Act include disgorgement of illicit profits to the U.S. Treasury and a civil penalty equal to 10% of the total value of any offending contract.
The measure arrives amid intensified scrutiny of prediction markets such as Kalshi and Polymarket. Earlier this month, two Democratic lawmakers introduced the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, and Senator Chris Murphy suggested recent wagers on potential U.S. military action involving Iran likely reflected the use of inside information.
States are also taking action: trade reporting indicates 11 states have pursued legal cases against prediction platforms, with two more preparing actions. At the federal level, Senators John Curtis and Adam Schiff have proposed bipartisan legislation to bar Commodity Futures Trading Commission (CFTC)-registered entities from listing contracts that resemble sports bets or casino-style games. The senators criticized the CFTC for stepping back from long-standing enforcement against what they call “gaming,” saying the agency has intervened in litigation and signaled a relaxation of enforcement.
In response to concerns about improper participation and insider trading, major prediction-market platforms have tightened rules, restricting participation by professional athletes, political candidates and other potentially problematic users in certain markets.
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