U.S. Congress moves to ban officials from prediction markets

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Sergey Shendetskyi

26.03.2026

U.S. Congress moves to ban officials from prediction markets — U.S. targets insider trading risks

U.S. lawmakers are considering a bill that could significantly reshape the rules for political prediction platforms. The proposal would prohibit senior government officials from participating in such markets.

Interest in these tools has grown rapidly, along with concerns that access to non-public information could be used for profit, CoinPedia reports.

Ban on betting for officials

The initiative, known as the PREDICT Act, was introduced by Representatives Adrian Smith and Nikki Budzinski. The bill would bar the president, vice president, members of Congress, and executive branch officials from participating in prediction markets.

The restrictions would also apply to spouses and dependent family members. The goal is to prevent situations where official knowledge can be turned into financial gain.

Violations would carry penalties. Offenders could face a 10% fine based on contract value, and any profits would be forfeited to the U.S. Treasury.

Lawmakers point to a core risk: individuals with access to non-public information may anticipate outcomes in advance or even influence them indirectly. In recent months, attention has focused on trades linked to military events, budget negotiations, and regulatory decisions.

Pressure on prediction markets

The PREDICT Act is not the only effort targeting the sector. The previously proposed BETS OFF Act also aims to restrict trading tied to sensitive government activities.

At the same time, pressure is building at the state level. Reports indicate that at least 11 states have already launched legal actions against such platforms, while several others are considering similar steps.

Another concern is the nature of these products. Some lawmakers argue that certain contracts effectively mirror gambling mechanics, resembling sports betting or casino-style wagers.

This has led to discussions about stricter measures, including potential restrictions on regulated platforms listing such contracts.

Why it matters for the market

Platforms like Polymarket and Kalshi have become a visible part of the fintech landscape. They are used not only for speculation but also as tools for assessing the probability of political and economic events.

However, growing adoption has brought increased regulatory scrutiny. The key question is where to draw the line between analytical tools and the misuse of insider information.

The adoption of the PREDICT Act could directly impact liquidity and forecast accuracy. Limiting access for the most informed participants may reduce abuse risks, but it could also reshape how these platforms function.

Additional pressure is coming from political groups. It was previously reported that former Congressman and White House Chief of Staff under Donald Trump, Mick Mulvaney, has led a coalition opposing prediction markets. The group Gambling Is Not Investing argues that platforms like Kalshi and Polymarket effectively offer sports betting disguised as financial contracts and operate in states where such activity is prohibited. This adds momentum to the regulatory debate and increases the likelihood of tighter oversight.

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