Key Takeaways
- A bipartisan House bill would bar members of Congress and senior federal officials from trading on prediction markets.
- Lawmakers say the proposal is designed to stop public officials from using nonpublic information for private gain.
- The bill lands as Congress, regulators and state authorities step up pressure on prediction markets from several directions.
A bipartisan pair of House lawmakers introduced a bill on March 25 that would bar members of Congress and senior federal officials from trading on prediction markets, adding a new Washington challenge for platforms already facing broader regulatory pressure.
Representatives Adrian Smith of Nebraska and Nikki Budzinski of Illinois said their proposal, the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, or PREDICT Act, would prohibit senior government officials from participating in insider prediction market trading.
Both lawmakers framed the bill as an ethics measure aimed at limiting conflicts of interest tied to privileged access.
Bipartisan Bill Targets Official Trading
The measure focuses on who can trade rather than on the broader legality of prediction markets themselves.
That keeps the emphasis on political ethics, conflicts of interest and the use of sensitive government information.
Smith said elected officials and senior federal personnel should not be able to turn privileged information into private profit.
Budzinski said public trust suffers when government officials can personally benefit from advance knowledge tied to public policy or other market-moving events.
The bill arrives after several weeks of rising pressure on platforms that list contracts tied to elections, legislation, military action and sports.
In Washington, the debate has shifted toward both the kinds of contracts these platforms can list and the kinds of traders who should be allowed to participate.
Pressure Builds in Washington
That pressure sharpened on March 17, when Democratic lawmakers introduced the BETS OFF Act, a separate proposal targeting event contracts tied to government actions, terrorism, war, assassination and outcomes that a trader knows or controls.
The bill marked another attempt to narrow the space available to politically sensitive or high-conflict markets.
Federal regulators are moving in parallel.
On March 12, the Commodity Futures Trading Commission (CTFC) published an advance notice of proposed rulemaking on prediction markets and separately issued staff guidance on event contracts, opening a formal process that could shape the next phase of federal oversight.
The agency said it was seeking public comment on whether new or amended rules are needed for event contracts traded on prediction markets.
The legal fight has also spread to the states.
On March 17, Arizona Attorney General Kris Mayes filed criminal charges against Kalshi entities, alleging the company operated an illegal gambling business in the state and engaged in election wagering without a license.
Sports Markets Add Another Front
A separate bipartisan Senate bill added to the pressure this week.
Senators Adam Schiff and John Curtis introduced the Prediction Markets Are Gambling Act, which would prohibit CFTC-regulated entities from offering sports-related prediction market contracts.
Their offices described the proposal as the first bipartisan Senate bill aimed at regulating prediction markets.
Major platforms have already started tightening their internal rules.
Polymarket said it updated its market integrity framework to explicitly ban trading based on stolen confidential information, illegal tips and positions of authority or influence over an event’s outcome.
Kalshi has also said it would block political candidates from trading on their own campaigns and restrict sports participants from trading on contracts tied to their teams, leagues or events.
The House bill adds another layer to that broader push. Congress is now pressing on insider access, military-event contracts and sports-style offerings at the same time, while regulators and state authorities continue testing the boundaries of what prediction markets can list and who gets to oversee them.
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