A bipartisan bill introduced in the US Congress aims to prohibit high-ranking government officials from placing wagers on prediction markets. The legislation, known as the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, or PREDICT Act, was put forward on Tuesday by Representative Adrian Smith and Representative Nikki Budzinski. The proposal reflects mounting concern over the potential misuse of privileged government information for financial gain.
The bill targets members of Congress, the president, the vice president, and political appointees, barring them from betting on the outcomes of political events, policy decisions, and other government actions on prediction markets. The restrictions also extend to the spouses and dependents of covered officials. Budzinski cited recent cases in which little-known traders earned large profits on events ranging from the prospect of war with Iran to the duration of a government shutdown, calling the pattern a reason to question whether inside information was being used.
Under the terms of the PREDICT Act, violations could result in a fine equal to 10% of the total contract value, along with the forfeiture of all profits to the US Treasury. Budzinski emphasized the need to close loopholes that currently allow individuals with access to sensitive information to profit from it. The bill represents one of several recent legislative efforts targeting the prediction market industry.
Earlier in the month, two Democratic lawmakers introduced a separate measure called the Banning Event Trading on Sensitive Operations and Federal Functions Act, or BETS OFF Act. Senator Chris Murphy alleged that inside information was likely used to place bets tied to President Donald Trump‘s military actions involving Iran. The parallel legislative push signals broad concern across party lines about the integrity of prediction markets.
Sports-related prediction contracts have also drawn scrutiny at both the federal and state levels. Eleven states have taken legal action against prediction market platforms, with two additional states having pending cases in progress. At the federal level, Senators John Curtis and Adam Schiff introduced a bill on Monday seeking to prohibit any entity registered with the Commodity Futures Trading Commission from listing contracts that resemble sports bets or casino-style games.
Curtis and Schiff argued that numerous companies have been offering contracts that are effectively indistinguishable from gambling. They also criticized the CFTC for reversing a longstanding enforcement position that had prohibited contracts involving or referencing gaming. The senators noted that the agency had intervened in ongoing litigation and moved toward rulemaking that would significantly relax its enforcement of that clause, a shift they described as abrupt.
In response to the growing regulatory pressure, two of the largest prediction market platforms, Kalshi and Polymarket, moved to tighten their internal rules. Both companies took steps to prevent professional athletes and political candidates from placing wagers on their platforms. The actions suggest the industry is attempting to adapt ahead of potential legislative or regulatory consequences.
Originally reported by CoinTelegraph.
