- A bipartisan U.S. Senate bill introduced on Thursday aims to explicitly ban government officials from insider trading on prediction markets.
- The act would require officials to report any market wagers over $250 and impose penalties of $500 or double the profit.
- This is the second such legislative effort this week, signaling growing regulatory concern over platforms like Kalshi and Polymarket.
On Thursday, U.S. lawmakers Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced the bipartisan Public Integrity in Financial Prediction Markets Act of 2026 in the second session of the 119th Congress. This legislation specifically targets insider profiteering by government officials on event-based prediction markets. The bill’s text aims to prohibit executives from using non-public information to bet on prediction market contracts.
Consequently, it covers the president, vice president, members of Congress, and numerous political appointees. The rules would also apply to employees of executive and independent regulatory agencies. The law defines insider information as any non-public data a reasonable investor would consider important.
Lawmakers expressed strong support for the initiative in their announcement. Slotkin stated, “No one should be profiting off the information and knowledge gained as a public servant, period.” She emphasized the bill has real teeth to ensure rule-breakers face significant consequences.
Meanwhile, the act mandates strict reporting for any contract wager exceeding $250. Officials must disclose transaction details to their ethics office within 30 days. Penalties for violations are set at the greater of $500 or double the profit gained from the wager.
However, this marks the second legislative proposal on the matter this week. The previously introduced PREDICT Act focuses more narrowly on political events and government actions. These efforts reflect a broader unease that prediction markets could become a new frontier for financial misconduct.
Recently, both Kalshi and Polymarket have moved to tighten their own platform rules against insider wagering. This regulatory push underscores the blurring line between simple betting and financial activity tied to real-world events.
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