Lawmakers To Be Prohibited From Trading on Specific Prediction Markets

(AsiaGameHub) –   Congress is considering new legislation that would prohibit Rep. Nikki Budzinski and other members of Congress from participating in prediction markets, specifically certain types of these markets.

Prediction Markets and Members of Congress Targeted in the Same Bill

The legislation, appropriately named the PREDICT Act, aims to prevent congressional members from trading on particular prediction markets. This latest proposal joins a growing list of similar legislative efforts.

The measure is supported by Rep. Budzinski and Rep. Adrian Smith, representing the Democratic and Republican parties respectively, demonstrating bipartisan cooperation on issues like prediction markets.

The full name of the PREDICT Act is the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, designed to tackle a major recent concern: the exploitation of insider and classified information for financial gain on these platforms.

This action follows several questionable trades related to geopolitical events in Venezuela and Iran. Numerous lawmakers have expressed alarm about the potential sale of classified information to foreign enemies for profit, which could jeopardize national security and American citizens.

Both Polymarket and Kalshi have quickly moved to restrict accounts suspected of making such bets, including at least one account that reportedly profited over $400,000 from the early-January U.S. (non-)military action in Venezuela.

In an extensive statement, Budzinski commented: „Americans are weary of politicians leveraging their positions for personal benefit, and the growth of prediction markets has amplified these concerns. Recently, we’ve observed cases where obscure traders have earned huge profits on events from potential war with Iran to the duration of government shutdowns, which rightly raises questions about insider information usage.“

Insider Information. Threats to National Security and Profiteering

Numerous legislators have demanded the elimination of prediction markets where participants might have advance knowledge of outcomes, plus the halt of markets trading on death, war, and crime outcomes – this is the DEATH BETS Act proposed by Rep. Mike Levin.

Other legislators have taken an even stronger position against these markets, as Sens. Adam Schiff and John Curtis have introduced the Prediction Markets Are Gambling Act, which aims to completely ban contracts on sporting events.