In a direct legislative response to the explosive growth of political prediction markets, a bipartisan coalition in the U.S. House of Representatives introduced a sweeping bill on Wednesday designed to ban the President, members of Congress, and senior federal officials from betting on the outcomes of government actions and global events.

The proposed legislation, titled the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act), represents the most targeted effort yet to close the regulatory loophole that currently allows public officials to legally wager on policy decisions using platforms like Polymarket and Kalshi.

Spearheaded by Representative Adrian Smith (R-NE) and Representative Nikki Budzinski (D-IL), the bill arrives amid mounting scrutiny over the ethical implications of government insiders utilizing decentralized and regulated forecasting platforms.

Scope and Mechanics of the PREDICT Act

If passed, the PREDICT Act would enact a blanket prohibition on political forecasting trades for the highest echelons of the federal government.

The restrictions would explicitly bar the following individuals from participating in prediction markets tied to political events, policy decisions, or government operations:

  • The President and Vice President of the United States.

  • All sitting Members of Congress.

  • High-ranking political appointees, including those serving in Executive Schedule positions.

  • The spouses and dependent children of the aforementioned officials.

“Serving the American people is a privilege, not a pathway to profit,” Representative Smith stated on Wednesday. “Our commonsense, bipartisan bill will give Americans confidence that the decisions of their elected officials are guided by merit, not personal profit.“

To enforce the ban, the legislation outlines strict financial penalties. Violators of the PREDICT Act would face a civil fine equal to 10% of the total value of the prohibited contract. Furthermore, individuals would be subject to full disgorgement of any generated profits, which would be redirected into the U.S. Treasury.

The Catalyst: Profiting from Geopolitics and Shutdowns

The urgency behind the PREDICT Act stems from recent highly publicized trades on prediction networks where anonymous users capitalized heavily on sensitive national security and domestic policy events.

Representative Budzinski pointed to these specific instances as the primary catalyst for the legislation, emphasizing the inherent risk of officials weaponizing classified or unreleased information.

“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,” Budzinski said. “In recent months, we’ve seen instances of little-known traders making massive profits on events ranging from war with Iran to how long a government shutdown will last, raising necessary questions about the use of inside information.”

A Broader Regulatory Crackdown

The introduction of the PREDICT Act is part of a widening, multi-front campaign by U.S. lawmakers to reign in the multi-billion-dollar event contracting industry.

The new House bill closely mirrors similar efforts brewing in the Senate. Earlier this month, Democratic lawmakers, led by Senator Chris Murphy, introduced a separate piece of legislation dubbed the BETS OFF Act (Banning Event Trading on Sensitive Operations and Federal Functions). That bill was similarly prompted by allegations that traders may have utilized asymmetrical, inside information to wager on U.S. military actions involving Iran.