Bipartisan bill would ban insider betting on prediction markets

A new bipartisan bill in Congress would ban lawmakers and government officials from insider betting on prediction markets, which allow wagers on events like election results, policy decisions and even war and peace.

The House bill, which takes aim at members of Congress and executive branch officials like the president, seeks to take the potential for profit out of decision-making by public officials.

“The American people are tired of politicians using their influence for personal gain, and the rise of prediction markets has made those concerns even more relevant,” said Rep. Nikki Budzinski (D-Illinois), one of the sponsors of the bill dubbed the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, or PREDICT Act.

“Serving the American people is a privilege, not a pathway to profit,” Rep. Adrian Smith (R-Nebraska) added. “Our commonsense, bipartisan bill will give Americans confidence that the decisions of their elected officials are guided by merit, not personal profit.”

The new legislation comes as reports say unidentified bettors on prediction markets like Kalshi and Polymarket have made huge profits on successful wagers predicting President Trump’s decisions on issues like imposing tariffs or launching the war on Iran and military action against Venezuela.

The bill would force bettors to cough up any profits from shady transactions along with a 10% fine, according to Politico, which first reported the new legislation.

The new bill comes after two senators introduced a separate bill to ban sports betting contracts on prediction markets.

The two prediction market giants are scrambling to institute their own new guardrails and surveillance tools that they say will deal with some of the questionable practices without legislation.

Kalshi said it will ban political candidates from trading on their own campaigns, and it would preemptively block anyone involved in college or pro sports from betting, or what the industry calls “trading contracts,” tied to their sports.

Polymarket says users cannot bet on any matters where they might possess confidential information or could influence the outcome of an event.

The legislative rush comes as fast-growing prediction markets have attracted big investors, including Trump’s allies and even his own family.

Donald Trump Jr. is an adviser to Kalshi and Polymarket and owns a stake in Polymarket through his private equity firm, 1789 Capital.