Key Insights:
- The bipartisan PREDICT Act would bar top officials and their families from betting on political outcomes on prediction market platforms.
- Separate STOP Corrupt Bets Act seeks broader bans on prediction market wagers tied to elections, government actions, wars, and sports.
- Surge in high‑accuracy bets and legal challenges facing Kalshi/Polymarket have intensified concerns over fairness and misuse.
As prediction market platforms are facing intensified challenges in the United States, lawmakers are moving to crack down on political betting. Lawmakers are introducing the PREDICT Act to block top government officials from participating in political betting on prediction markets.
This bill focuses on the possibility of government officials using insider information for personal gain on platforms like Kalshi and Polymarket. The proposal comes amid growing concerns of fairness and insider trading advantage.
PREDICT Act Targets Insider Advantage in Prediction Market
The US lawmakers from both parties are looking for ways to keep federal officials out of prediction market. The focus is particularly on bets on political outcomes.
As the best way, Representatives Adrian Smith and Nikki Budzinski have introduced a new bipartisan bill called the PREDICT Act.
Lawmakers in the United States from both parties are looking to keep federal officials out of prediction market platforms, where people place bets on political outcomes. These platforms have recently come under growing scrutiny over concerns about fairness and the potential misuse of insider information.
The proposal aims to ban federal officials from betting on political and policy-related events. This ensures that those in power do not use privileged information for personal financial gain.
Under the PREDICT Act, top officials would be barred from betting on political events, policy decisions, or other government outcomes. The officials include the president, vice president, members of Congress, political appointees, and their families. If they violate this rule, they could face 10% fine on the contract value. Violators will also have to forfeit any profits, which would go to the US Treasury.
A Push to Ban Prediction Market Bets on Key Events
In addition to the PREDICT Act, a group of Democratic lawmakers introduced legislation to stop people from placing bets on key events. If this bill passes, prediction market platforms may face restrictions on betting on elections, government actions, wars, and even sports.
Senators Jeff Merkley and Elizabeth Warren, along with Representative Jamie Raskin, are leading the proposal, known as the STOP Corrupt Bets Act. The proposal comes amid growing concerns over unfair betting on prediction matters. Recent events, such as bets on the removal of Venezuelan President Nicolas Maduro and Middle East tensions, have further escalated these concerns.
Merkley stated, “When anyone can use prediction markets to make a well-timed bet on Congress passing a bill, government decisions, or a military strike, it’s ripe for corruption and erodes public trust.” According to Merkley, the STOP Corruption Bets Act brings back the “original intent of prediction markets.” The bill also intends to prevent these markets from possible misuse of the prediction market platforms.
Rising Scrutiny over Prediction Markets
Both the PREDICT Act and the STOP Corrupt Bets Act come amid rising scrutiny over prediction market platforms. On-chain analysis reveals that accounts with unusually high success rates in betting on military events, including strikes involving Iran.
In addition, the US States are increasingly targeting platforms like Kalshi and Polymarket. These platforms are facing multiple lawsuits, especially over allegations of providing unregistered and illegal gambling services.