A bipartisan group of US legislators has introduced a new bill targeting insider trading on prediction markets, marking the second such legislative effort in a single week. Senators and representatives Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff announced the Public Integrity in Financial Prediction Markets Act of 2026 on Thursday. The move reflects mounting concern that platforms such as Kalshi and Polymarket could be exploited by officials with access to privileged government information.
Slotkin stated that no one should profit from information or knowledge acquired through public service, describing the legislation as an important first step in establishing common sense rules around prediction markets. She added that the bill carries real consequences for those who violate its provisions. The measure has been introduced during the second session of the 119th Congress.
If passed, the bill would prohibit government executives from using insider information to place bets on prediction market contracts. Its scope would extend to the president, vice president, members of Congress, the House of Representatives, and the Senate. Political appointees and employees of executive agencies or independent regulatory agencies would also fall under its provisions.
The legislation defines insider information as any detail that a reasonable investor would consider significant when making a decision related to a prediction market contract and that is not publicly available. Under the bill’s reporting requirements, a covered official must disclose any contract wager exceeding $250 to the relevant supervising ethics office within 30 days. That disclosure must include the number of contracts purchased, the price, the date and time of the transaction, the name and position of the contract, the trading platform used, and any profit or loss recorded.
Penalties outlined in the bill would require violators to pay the greater of $500 or double the profit earned from the prediction market contract. The measure underscores a broader legislative push to treat prediction market activity as a potential new avenue for financial misconduct by public officials. Both federal and state lawmakers have increasingly turned their attention to the sector in recent months.
The bill follows the PREDICT Act, introduced earlier in the week by US Representative Adrian Smith and Representative Nikki Budzinski. That legislation focuses specifically on preventing insider trading tied to political events, policy decisions, and other government actions. While both bills share a common goal, they differ in their precise scope and framing of prohibited conduct.
Meanwhile, Kalshi and Polymarket have each taken steps to tighten their own internal rules to prevent insiders from placing wagers on their platforms. The dual legislative push, combined with voluntary platform measures, signals a growing effort across multiple fronts to address the integrity concerns surrounding prediction markets. Whether either bill advances through Congress remains to be seen.
Originally reported by CoinTelegraph.
