U.S. lawmakers have introduced the bipartisan PREDICT Act to ban members of Congress, the president, and other high-ranking officials from betting on political events via prediction markets. The bill targets insider trading concerns, proposing fines and profit disgorgement. This follows separate legislative efforts to ban sports-related contracts on these platforms, reflecting growing federal and state scrutiny of prediction markets like Kalshi and Polymarket.
U.S. Representatives Adrian Smith and Nikki Budzinski introduced the bipartisan Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act. The bill would prohibit members of Congress, the president, vice president, and political appointees from wagering on political events and government actions.
The proposed restriction also applies to the spouses and dependents of these officials. It includes a potential penalty featuring a 10% fine on contract value and the disgorgement of all profits.
Budzinski stressed the importance of closing loopholes to ensure people with inside knowledge “cannot profit from it.” These concerns arose following instances of traders making large profits on events like war with Iran and government shutdowns.
Two Democratic lawmakers recently presented a related bill called the Banning Event Trading on Sensitive Operations and Federal Functions Act. Senator Chris Murphy alleged that inside information was likely used for bets on former President Donald Trump’s military actions involving Iran.
Separate legislation from Senators John Curtis and Adam Schiff aims to ban CFTC-registered entities from listing prediction market contracts resembling sports bets. They argued that many contracts are indistinguishable from gambling and criticized the CFTC’s recent regulatory approach.
This federal action coincides with legal challenges in 11 states against prediction markets, with two more states having pending cases. Major platforms Kalshi and Polymarket have since moved to tighten rules preventing professional athletes and political candidates from wagering.
