US Bill Aims to Ban Officials From Prediction Market Betting

• US Representatives Adrian Smith and Nikki Budzinski introduced the PREDICT Act to ban federal officials from wagering on prediction markets.
• The legislation covers the President, Vice President, members of Congress, political appointees, and their immediate families.
• Penalties for violating the act include a 10% fine of the contract's total value and the disgorgement of all profits to the US Treasury.

Targeting Insider Knowledge in Government

The PREDICT Act, formally known as the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, was introduced on Tuesday as a bipartisan effort to address concerns regarding insider trading. The bill targets the ability of high-ranking officials to profit from non-public information by betting on outcomes like policy decisions, political events, and other government actions.

According to Representative Nikki Budzinski, the move follows reports of traders earning significant profits on sensitive events, such as the duration of a government shutdown or potential military action involving Iran. The bill aims to close loopholes that currently allow those with privileged access to government data to monetize that knowledge on platforms like Kalshi and Polymarket.

Expanding Legislative and Regulatory Oversight

This initiative is part of a broader push to regulate event contracts. A separate proposal, the BETS OFF Act, was recently introduced by Senator Chris Murphy and other Democratic lawmakers to ban event trading on sensitive federal operations. Additionally, Senators John Curtis and Adam Schiff have proposed legislation to prevent any Commodity Futures Trading Commission (CFTC) registered entity from listing contracts that resemble casino-style games or sports betting.

The legal landscape is shifting rapidly at the state level as well:

• 11 states have already initiated legal proceedings against prediction market platforms.
• 2 additional states currently have legal actions pending.
• The CFTC has faced criticism for allegedly relaxing its enforcement of "gaming" prohibitions in recent months.

Industry Reactions and Platform Changes

As scrutiny intensifies, major platforms are adjusting their internal policies. Both Kalshi and Polymarket have taken steps to restrict certain users, such as professional athletes and political candidates, from participating in markets relevant to their fields. These voluntary measures come as lawmakers argue that many current prediction market offerings are indistinguishable from gambling and pose risks to the integrity of public institutions.