American lawmakers have opened new ground in the fight against prediction markets. A bipartisan House bill now aims to stop top government officials and their families from trading in government-related profits, as pressure also builds on sports and war-related contracts.
Summary
- The PREDICT Act would prohibit Congress, presidents, nominees, spouses, and dependents from trading related to government prediction markets.
- Lawmakers tied the proposal to concerns that insiders could profit from wars and policy events.
- Separate bills in the Senate and House also target sports contracts as pressure mounts on national arenas.
Representatives Adrian Smith and Nikki Budzinski introduced the Prevention of Real-Time Exploitation and Insider Fraud Congressional Trading Act, or the PREDICT Act, on March 25, 2026.
The bill would prohibit members of Congress, their spouses and dependent children, the president, vice president, and political appointees from trading on political events, policy decisions, and other government actions in the prediction markets.
The proposal also sets penalties for violations. Reports on the bill state that this measure will impose a civil penalty equal to 10% of the contract value and require any profit to go to the US Treasury. Budzinski said recent market activity raises questions about whether insiders can benefit from these trades.
Budzinski said, “we’ve seen cases of anonymous traders making huge profits” from war-related events and government-sponsored wars. Smith said community service should not be “a way to make a profit.” Their comments put the bill into the broader debate about access to sensitive information in Washington.
That debate grew in March. On March 17, Senator Chris Murphy and Representative Greg Casar introduced the BETS OFF Act, which would ban betting on government action, terrorism, war, assassinations, and events where a person knows or controls the outcome. Murphy’s office said the unusual trade before military action involving Iran and Venezuela raises new concerns.
Congress also opposes sports-related contracts. On March 23, Senators Adam Schiff and John Curtis introduced the Prediction Markets Are Gambling Act. Their bill would stop CFTC-registered businesses from listing contracts such as sports betting or casino-style games.
Schiff said, “Sports betting contracts are sports betting.” Curtis said the products are under state control, not federal regulators. Their offices say sporting event contracts are now traded in all 50 states, even where local law prohibits gambling.
Platforms deal with federal action and new laws
The industry is also under pressure outside of Congress. On March 20, a Nevada judge temporarily barred Kalshi from awarding event contracts to the state without a license. The case is part of a wider fight over whether these products are financial instruments or illegal gambling.
At the same time, Kalshi and Polymarket have strengthened their own rules. Kalshi banned political candidates from trading their campaigns, while Polymarket updated its rules to prevent users from trading confidential information or direct influence over the outcome.
