US lawmakers have introduced a bill that would ban members of Congress, the president, and other senior government officials from participating in prediction markets.
The bipartisan proposal, put forward by Adrian Smith and Nikki Budzinski, is titled the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act) and was introduced on Tuesday.
Budzinski said recent cases of relatively unknown traders making large profits on events such as potential conflict with Iran or the duration of government shutdowns have raised concerns about the possible misuse of insider information.
The legislation comes amid increasing scrutiny of prediction markets in the US, with regulators and lawmakers focusing on platforms like Kalshi and Polymarket over contracts tied to sports, geopolitical events, and politics.
If passed, the bill would prohibit members of Congress, the president, vice president, and political appointees from betting on the outcomes of political events, policy decisions, or other government actions on prediction markets. The restrictions would also apply to their spouses and dependents.
The proposed PREDICT Act outlines penalties including a 10% fine on the total value of a contract, along with the forfeiture of all profits to the US Treasury.
Nikki Budzinski emphasized that closing loopholes is essential to ensure individuals with insider knowledge cannot profit from it.
She is not alone in raising concerns. Earlier this month, two Democratic lawmakers introduced a separate proposal—the BETS OFF Act. Speaking on the issue, Chris Murphy alleged that individuals may have used insider information to place bets related to US President Donald Trump’s military actions involving Iran.
Lawmakers are also increasing scrutiny beyond insider trading, particularly around sports-related prediction contracts. At both federal and state levels, concerns have been raised about whether such contracts resemble gambling. Reports indicate that 11 states have already taken legal action against prediction markets, with two more preparing similar moves.
At the federal level, John Curtis and Adam Schiff introduced legislation aimed at preventing any entity registered with the Commodity Futures Trading Commission from offering prediction market contracts that resemble sports betting or casino-style games. They argued that many current offerings are effectively indistinguishable from gambling and criticized the regulator’s recent shift in enforcement, which they say has relaxed oversight of such contracts.
Following increased scrutiny, major platforms like Kalshi and Polymarket have moved to tighten their rules, aiming to prevent professional athletes and political candidates from participating in prediction markets.
