Key Highlights
- New legislation would prohibit federal lawmakers, executives, and senior staff from wagering on prediction market platforms
- Penalties include a 10% fine plus mandatory forfeiture of all profits to federal coffers
- Legislation emerges after questionable Iran strike wagers generated over $1 million in trader profits
- Kalshi endorses the proposed restrictions; Polymarket remains silent on the matter
- Both companies implemented updated trading policies Monday before the bill’s introduction
A new bipartisan legislative effort seeks to prohibit politicians and high-ranking government personnel from participating in prediction market betting. The proposed PREDICT Act arrived through collaboration between Representative Nikki Budzinski, an Illinois Democrat, and Representative Adrian Smith, a Nebraska Republican.
🚨NEW: @Kalshi strengthens prediction market integrity:
New tech preemptively blocks politicians, athletes, and sports personnel from trading on markets they’re involved in.
Whistleblower tools and league cooperation added to prevent insider trading and manipulation. pic.twitter.com/R0bRntQhyQ
— The Crypto Times (@CryptoTimes_io) March 24, 2026
This legislation focuses on platforms such as Polymarket and Kalshi, venues where participants wager on political developments, regulatory decisions, and governmental proceedings.
The PREDICT Act would prevent congressional members, the president, the vice president, and appointed officials from engaging in these trading activities. The restriction encompasses their spouses and dependent children as well.
Violators would incur a financial penalty equivalent to 10% of their complete transaction value. Additionally, they must surrender all earnings to the United States Treasury.
Suspicious trading patterns prompted the legislative response. A limited group of bettors earned more than $1 million on Polymarket through wagers predicting the exact timing of American military action against Iran.
Earlier during the current year, an unidentified trader secured over $400,000 by wagering that Venezuelan President Nicolas Maduro would vacate his position, placing the bet mere hours before a US military intervention aimed at his removal.
Budzinski indicated these incidents generated concerns regarding whether individuals possessing classified government intelligence were exploiting that information for financial gain through prediction markets.
Multiple Legislative Initiatives Emerge
The PREDICT Act joins several other bills addressing prediction markets that lawmakers have presented in recent weeks. Senator Chris Murphy and colleagues put forward legislation prohibiting all wagers related to terrorism, military conflicts, and political assassinations. Senators Jeff Merkley and Amy Klobuchar presented the End Prediction Market Corruption Act during March.
Monday brought another bipartisan bill from Senators John Curtis and Adam Schiff, proposing restrictions on sports and casino-style betting contracts available through CFTC-registered prediction market venues.
State governments have also mobilized, with 11 states pursuing legal challenges against prediction markets and two additional states preparing similar cases.
Platform Reactions to Proposed Restrictions
Kalshi confirmed existing policies against insider trading by government personnel and characterized the bill as a “welcome measure.” The platform expressed support for establishing uniform industry standards.
Polymarket declined to provide statements regarding the proposed legislation.
Both companies revised their internal policies Monday. Kalshi unveiled enhanced screening procedures preventing politicians from trading on their own electoral campaigns and prohibiting athletes from wagering on competitions in their respective sports. Polymarket instituted bans on transactions derived from stolen or confidential data and trades executed by individuals capable of affecting an event’s result.
Budzinski confirmed her office maintains ongoing discussions with the prediction market sector as the bill advances.
The PREDICT Act would direct suspected infractions to the House Ethics Committee for investigation and enforcement. The bipartisan nature of the legislation, according to Budzinski, improves its prospects for approval in the Republican-led House and Senate.
The proposed law allows limited prediction market participation by political staff members. A chief of staff could participate in sports-related betting activities like March Madness tournaments, while remaining prohibited from wagering on governmental policy matters such as federal agency operational schedules.
