U.S. lawmakers have introduced a second bill this week to curb insider trading in prediction markets by government officials, amid rising concerns over activity on platforms like Kalshi and Polymarket.
In a Thursday announcement, Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff unveiled the bipartisan Public Integrity in Financial Prediction Markets Act of 2026.
“No one should be profiting off the information and knowledge gained as a public servant, period,” Slotkin said, emphasizing that the bill is a first step toward establishing clear rules for prediction markets, with meaningful penalties for violations.
The legislation reflects growing concern that prediction markets—where users bet on real-world outcomes—could become a new avenue for insider trading, as the line between wagering and financial activity continues to blur.
Introduced during the second session of the 119th Congress, the bill seeks to prevent government officials from using insider information to place bets on prediction market contracts.
If passed, the Public Integrity in Financial Prediction Markets Act of 2026 would apply to top officials across government, including the president, vice president, and members of Congress in both the House of Representatives and the Senate.
The legislation would also extend to political appointees and employees of executive and independent regulatory agencies.
It defines insider information as any non-public detail that a reasonable investor would consider important when deciding whether to enter a prediction market contract.
Under the proposed rules, government officials would be required to report any wagers exceeding $250 within 30 days to their supervising ethics office. Disclosures must include details such as the number of contracts purchased, price, transaction date and time, contract name, position taken, platform used, and any resulting profit or loss.
Penalties would require violators to pay the greater of $500 or twice the profits earned from such trades.
The bill comes as scrutiny of prediction markets continues to grow among state and federal lawmakers. It is the second such proposal introduced this week, following the PREDICT Act put forward by Adrian Smith and Nikki Budzinski.
While the PREDICT Act focuses specifically on preventing insider trading tied to political events and policy decisions, the newer bill takes a broader approach to restricting misuse of insider information.
Meanwhile, platforms like Kalshi and Polymarket have recently moved to tighten their rules in an effort to prevent insider trading on their services.
