Congressman Adrian Smith and Congresswoman Nikki Budzinski have introduced the PREDICT Act. The bill bars federal officials from trading in prediction markets tied to political events.
The Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act targets a broad group. Members of Congress, their spouses and dependents, the President, Vice President, political appointees, senior executive branch employees above the GS-15 level, military officers at the O-7 and above level, and judicial officials, and more all fall under its restrictions.
“The American people are tired of politicians using their influence for personal gain, and the rise of prediction markets has made those concerns even more relevant. In recent months, we’ve seen instances of little-known traders making massive profits on events ranging from war with Iran to how long a government shutdown will last, raising necessary questions about the use of inside information,” Representative Budzinski said.
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In addition, violators would face a civil penalty of 10% of the transaction value. They must also disgorge all profits to the US Treasury. Officials cannot use office allowances, campaign contributions, or government salaries to cover those penalties.
Mounting Legislative Pressure on Prediction Markets
This signals a push to close the insider advantage as prediction markets like Kalshi and Polymarket gain mainstream traction. The PREDICT Act is not an isolated effort.
Representative Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act in January. This was introduced after a suspicious Polymarket trade preceded the capture of Venezuelan President Nicolás Maduro.
Senator Richard Blumenthal and Senator Andy Kim also proposed the Prediction Markets Security and Integrity Act to prevent fraud in prediction markets. Senator Adam Schiff and John Curtis introduced the Prediction Markets Are Gambling Act, targeting sports contracts.
Moreover, Schiff and Representative Mike Levin have introduced the DEATH BETS Act to prohibit event contracts tied to war, assassination, and terrorism.
Meanwhile, Prediction market platforms have tried to get ahead of the legislative wave. Kalshi announced new screening tools to block politicians and athletes from trading on events they can influence.
Polymarket also published updated integrity rules banning trades based on stolen information, illegal tips, or conflicts of interest.
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The post Congress Wants to Ban Politicians From Betting on Their Own Decisions appeared first on BeInCrypto.
