- Bipartisan lawmakers introduced the PREDICT Act to ban high-ranking federal officials and their families from betting on political events via prediction markets.
- The proposed penalties include a 10% fine on the contract’s total value and the forfeiture of all profits to the U.S. Treasury.
- Separate legislative efforts, like the BETS OFF Act, target inside information use, while another bill seeks to ban CFTC-registered entities from listing sports-related prediction contracts.
In a significant bipartisan move, U.S. Representatives Adrian Smith and Nikki Budzinski introduced the PREDICT Act on Tuesday to prohibit officials, from Congress members to the president, from wagering on prediction markets. The bill specifically bars bets on political events, policy decisions, and government actions, extending the ban to their spouses and dependents.
“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,” Budzinski said. Consequently, the legislation is designed to close loopholes so people with inside knowledge “cannot profit from it.”
The proposed penalties include a 10% fine on the contract’s total value and disgorgement of all profits to the U.S. Treasury. This action amplifies growing federal scrutiny of platforms like Kalshi and Polymarket, which offer contracts on politics, war, and sports.
Meanwhile, Senators Curtis and Schiff introduced a separate bill to ban CFTC-registered entities from listing contracts resembling sports bets. They criticized the CFTC for reversing its longstanding enforcement against ‘gaming’ contracts, arguing many are indistinguishable from gambling.
Separately, Senator Chris Murphy alleged insider information was likely used for bets on military actions involving Iran, according to a statement on a different proposal. This legislative pressure has already prompted Kalshi and Polymarket to tighten rules against wagers by professional athletes and political candidates.
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