US lawmakers push to block insider bets on government events

US lawmakers have opened a new front in the fight over prediction markets. A bipartisan House bill now aims to stop top federal officials and their families from trading on government-related outcomes, as pressure also builds around sports and war-linked contracts.

Representatives Adrian Smith and Nikki Budzinski introduced the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, or PREDICT Act, on March 25, 2026. 

The bill would bar members of Congress, their spouses and dependent children, the president, the vice president, and political appointees from trading on political events, policy decisions, and other government actions on prediction markets.

The proposal also sets penalties for violations. Reports on the bill say the measure would impose a civil fine equal to 10% of the contract’s value and require any profit to go to the US Treasury. Budzinski said recent market activity raised questions about whether people with inside knowledge could benefit from these trades.

Budzinski said, “we’ve seen instances of little-known traders making massive profits” on events tied to war and government funding fights. Smith said public service must not become “a pathway to profit.” Their comments placed the bill within a wider debate over access to sensitive information in Washington.

That debate has grown in March. On March 17, Senator Chris Murphy and Representative Greg Casar introduced the BETS OFF Act, which would ban wagering on government actions, terrorism, war, assassination, and events where a person knows or controls the outcome. Murphy’s office said unusual trading before military actions involving Iran and Venezuela raised fresh concerns.

Congress is also moving against 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 entities from listing contracts that resemble sports bets or casino-style games.

Schiff said, “Sports prediction contracts are sports bets.” Curtis said the products belong under state control, not federal regulators. Their offices said sports event contracts now trade across all 50 states, even where local law restricts gambling.

Platforms face state action and new rules

The industry is also under pressure outside Congress. On March 20, a Nevada judge temporarily blocked Kalshi from offering event contracts in the state without a license. The case forms part of a wider fight over whether these products are financial tools or unlicensed gambling.

At the same time, Kalshi and Polymarket have tightened their own rules. Kalshi barred political candidates from trading on their own campaigns, while Polymarket revised its rules to block trades by users with confidential information or direct influence over an outcome.