US Lawmakers Move to Ban Political Betting By Officials Through New PREDICT Act

Highlights:

• US lawmakers introduced new rules to stop officials from using inside information on prediction markets.
• The PREDICT Act blocks political betting by senior officials and their families to protect public trust.
• States and federal agencies are increasing pressure on prediction platforms offering event-based contracts.

Representatives Adrian Smith and Nikki Budzinski have introduced a new bill, the PREDICT Act, to restrict political betting by top officials. The bipartisan proposal targets participation in prediction markets tied to government actions. Lawmakers introduced the bill on Tuesday as scrutiny around these platforms increased in recent months.

U.S. Representatives Adrian Smith and Nikki Budzinski have introduced a bipartisan bill, the PREDICT Act, which seeks to ban the president, vice president, members of Congress, and political appointees — along with their spouses and dependents — from wagering on prediction… pic.twitter.com/oPXNJkhasO

— Wu Blockchain (@WuBlockchain) March 26, 2026

The bill would prohibit the president, the vice president, and all sitting members of Congress from placing such bets. It also applies to senior political appointees serving in executive roles. In addition, the proposal includes spouses and dependent children of these officials. Lawmakers designed this scope to block both direct and indirect access to privileged information.

The restrictions cover wagers on outcomes of political events, policy decisions, and government actions. They also include contracts tied to military operations and national security developments. Platforms such as Polymarket and Kalshi currently list these contracts for public trading. Lawmakers argue that officials can access non-public information before these outcomes become public.

There is no particular statute that prohibits the use of prediction markets by federal officials at present. This loophole enables them to engage in event-based trading without explicit limitations.

According to lawmakers, this loophole poses a risk that governmental obligations may overlap with individual financial situations. Adrian Smith stated that public service should not generate profit based on official choices. He further said that the bill will enhance confidence in the actions of leaders.

Insider Profit Risks And Financial Penalties Drive The Proposal

The bill was proposed by legislators following a series of trading practices that caused alarm in Washington. Over the past few months, traders have registered massive gains due to the occurrence of sensitive geopolitical and policy events. These trades captured situations connected to the Iran-Israel tensions and the government shutdown timelines. This kind of activity casts doubt on the possibility of some participants having access to early or privileged information.

Nikki Budzinski claimed that the recent trades illustrated how unknown people earned huge returns. She observed that these outcomes entailed national security-related events and federal decision-making. She contended that such markets could be exploited by officials who had early access to information.

The proposal establishes specific financial sanctions in case of violations. Violators would be fined 10% of the value of the contract, and they would also repatriate all profits associated with the trade. Those funds would be sent to the US Treasury. Lawmakers believe that such penalties will serve as a significant deterrent against insider activity.

The bill also expands how lawmakers apply insider trading principles. Historically, regulators concentrated on securities markets and equities. Nevertheless, prediction markets have recently enabled the ability to trade on future real-world results. These platforms have expanded at an alarming rate and draw a considerable number of users whenever there is a major event.

PREDICT Act Expands Scrutiny Across Event Trading Platforms

The proposal comes as lawmakers and regulators increase pressure on prediction market platforms. Arizona, Illinois, Maryland, Montana, Nevada, New Jersey, Ohio, Oregon, and Washington have taken legal action against platforms like Kalshi and Polymarket. Massachusetts and Michigan also have pending cases under review. The legal actions target contracts linked to sports, politics, and other real-world outcomes.

At the federal level, lawmakers have introduced parallel legislation to address related risks. Senator Chris Murphy introduced the BETS OFF Act to restrict betting tied to sensitive government operations. He said traders may have used private information when placing bets on US military actions involving Iran.

This is corruption with grave consequences.

That’s why we need our BETS OFF Act – to stop prediction markets from offering national security decision makers & others with access to sensitive intelligence the ability to gamble on acts of war. https://t.co/7h1RYixJW5

— Congressman Gabe Amo (@RepGabeAmo) March 24, 2026

Senators John Curtis and Adam Schiff introduced another proposal focused on federal oversight. Their bill targets entities registered with the Commodity Futures Trading Commission. It would prevent these platforms from listing contracts that resemble sports betting or casino-style games.