U.S. lawmakers have introduced the bipartisan PREDICT Act, a bill that would prohibit senior government officials from trading on political prediction markets. The proposal covers the president, vice president, members of Congress, executive branch appointees, as well as their spouses and dependent children, aiming to stop public officials from profiting from government-related outcomes.
Bill targets contracts tied to politics and policy decisions
According to the March 25 proposal, Representatives Adrian Smith and Nikki Budzinski introduced the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act. The measure focuses on prediction market contracts linked to political events, policy decisions, and government actions. Supporters argue that officials with access to sensitive non-public information may gain an unfair edge if they are allowed to trade on those outcomes.
The scope is broad. It does not stop at lawmakers alone, but also includes the president, vice president, executive branch officials, and immediate family members covered by the bill. That structure is designed to prevent restricted participants from routing trades through spouses or dependents.
Violators would face a fine and loss of all profits
The penalty section is direct. Anyone covered by the rule who trades prohibited contracts would face a fine equal to 10% of the contract value and would also have to surrender all profits from the trade. Recovered funds would be sent to the U.S. Treasury.
Backers of the legislation say prediction markets have drawn scrutiny after reports that traders made large gains from geopolitical developments and policy decisions. Contracts mentioned in the debate include those tied to war developments, government shutdowns, and regulatory outcomes. Lawmakers say the concern is not only early access to information, but also the possibility that people close to government decisions could influence markets tied to those decisions.
Prediction market platforms face rising legal pressure
The PREDICT Act arrives as prediction markets face pressure on multiple fronts. Earlier this month, another proposal called the BETS OFF Act sought to restrict trading tied to sensitive government operations. At the state level, reports say 11 states have already launched legal actions, while 2 more states are considering similar moves.
Federal lawmakers have also raised objections to contracts that resemble sports betting or casino-style markets. Some proposals would limit regulated entities from listing those products. If enacted, the PREDICT Act would narrow the pool of users allowed to trade political contracts and tighten scrutiny around insider-information risks.