TLDR.
- Smith and Budzinski introduced the bipartisan PREDICT Act on Wednesday.
- The bill covers Congress, the president, senior officials, spouses, and dependent children.
- It would ban contracts tied to elections, legislation, and other government actions.
- Violators would face a 10% civil fine and lose profits to the U.S. Treasury.
- CFTC rulemaking and state pressure are adding to scrutiny around prediction markets.
Federal officials could soon face a ban on betting on elections, legislation, and government actions. Representatives Adrian Smith and Nikki Budzinski introduced the bipartisan PREDICT Act on Wednesday. The move comes as prediction markets and March Madness betting reach wider audiences. Adam Minter said the bipartisan push against prediction market betting is shortsighted.
What the PREDICT Act would ban
The bill would cover members of Congress, the president, and the vice president. It would also apply to political appointees and senior federal employees. Spouses and dependent children would fall under the same limits.
Covered officials could not enter contracts tied to elections, legislation, or other government actions. That language targets markets where political or policy outcomes decide payouts. Supporters say insider access can distort prices and public trust.
The penalties are direct and specific. Violators would face a civil fine equal to 10% of transaction value. Any profit would be forfeited and sent to the U.S. Treasury.
Smith framed the bill as a public service measure. He said, “Serving the American people is a privilege, not a pathway to profit.” He also said decisions should not be shaped by personal financial gain.
Why prediction markets face more scrutiny
Prediction markets let users trade contracts linked to real events. Those events can include elections, crypto prices, wars, and economic decisions. Their growth has raised questions about oversight and fair access.
Onchain researchers at Bubblemaps flagged accounts with unusually strong records in military markets. Some bets tracked developments involving Iran with very high accuracy. That pattern raised questions about access to nonpublic information.
Separate reporting said several accounts made nearly $1 million across multiple markets. In some cases, win rates were above 90%. No direct tie to government officials has been established.
That has widened the debate around insider trading risks in prediction markets. Lawmakers say public officials may hold information that ordinary traders do not. The bill aims to remove that risk for federal officeholders and their families.
Platforms and regulators face more pressure
Platforms such as Polymarket and Kalshi have tightened controls on possible insider activity. They have also removed some high-risk markets after public backlash. Those steps came as attention around political and geopolitical contracts increased.
The Commodity Futures Trading Commission has signaled plans for clearer federal rules. At the same time, some states are increasing pressure on prediction platforms. That leaves the sector facing both federal and state scrutiny.
The wider backdrop is a betting market that is becoming harder to avoid. The American Gaming Association expects $3.3 billion in legal March Madness wagers this year. Coinbase has also pushed March Madness markets to home screens.
That setting has fed criticism from both supporters and skeptics of prediction markets. Adam Minter said the bipartisan push against prediction market betting is shortsighted. Still, lawmakers backing the PREDICT Act say the bill addresses a clear conflict risk.
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