- PREDICT Act proposes banning US president, Congress, and officials from prediction market bets
- Introduced by Adrian Smith and Nikki Budzinski
- Targets wagers on political events, policy decisions, and government actions
- Includes spouses and dependents under restrictions
- Penalties include 10% fines and profit disgorgement to US Treasury
- Comes amid broader scrutiny of platforms like Kalshi and Polymarket
US lawmakers have introduced a bipartisan bill aimed at banning high-ranking government officials from participating in prediction markets. The proposed legislation, titled the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act), was introduced by Representatives Adrian Smith and Nikki Budzinski. The bill seeks to prohibit members of Congress, the president, vice president, and political appointees from wagering on outcomes tied to political events, policy decisions, and other government actions. The restrictions would also extend to spouses and dependents of these officials.
According to Budzinski, recent cases of traders generating large profits from events such as geopolitical developments and government shutdown timelines have raised concerns about the potential use of insider information. The proposed penalties under the PREDICT Act include a 10% fine based on the total contract value, along with the requirement to return all profits to the US Treasury.
Rising Scrutiny on Prediction Markets
The bill comes amid increasing regulatory and legislative attention on prediction market platforms such as Kalshi and Polymarket. Lawmakers have raised concerns about contracts tied to sports, political developments, and military actions.
Earlier in March, two Democratic lawmakers introduced another bill, the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act. Senator Chris Murphy stated that individuals may have used inside information to place bets related to military actions involving Donald Trump. At the state level, 11 states have already taken legal action against prediction markets, with two more states preparing similar actions.
Additional Federal Action on Sports-Linked Contracts
Federal lawmakers are also addressing concerns related to sports-linked prediction contracts. Senators John Curtis and Adam Schiff introduced a separate bill aimed at preventing Commodity Futures Trading Commission (CFTC)-registered entities from offering contracts resembling sports betting or casino-style games.
The senators argued that some prediction market offerings are effectively indistinguishable from gambling. They also criticized the CFTC’s recent approach, claiming it represents a shift from its longstanding enforcement against contracts tied to gaming. Following increased scrutiny, platforms such as Polymarket and Kalshi have taken steps to tighten their rules, restricting participation by professional athletes and political candidates.
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