A new piece of legislation has been pitched in Congress, with Rep. Nikki Budzinski seeking to have herself and fellow lawmakers restricted from prediction markets – or at least certain prediction markets.
Prediction Markets and Members of Congress Targeted in the Same Bill
The bill, aptly called the PREDICT Act, will seek to bar members of Congress from making trades on specific prediction markets, and the latest draft is part of a series of similar legislative moves.
The new bill is backed by both Rep. Budzinski and Rep. Adrian Smith, a Democrat and a Republican, respectively, and continues to see the two parties work across political divides on certain issues, including prediction markets.
The idea of the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, as the PREDICT Act is known in full, is to address one of the most pressing worries that has been raised recently – the use of insider and classified information to earn money from such platforms.
The move comes after a series of suspicious trades made on geopolitical actions in Venezuela and Iran, with a disparate cohort of lawmakers voicing their concerns about trading classified information to foreign adversaries for the sake of profit, while endangering the nation and American lives.
Polymarket and Kalshi have both rushed to clamp down on accounts that may be placing such wagers, with at least one account known to have made more than $400,000 on the early-January (non-)military intervention the United States conducted in Venezuela.
In a lengthy statement, Budzinski said: “The American people are tired of politicians using their influence for personal gain, and the rise of prediction markets has made those concerns even more relevant. In recent months, we’ve seen instances of little-known traders making massive profits on events ranging from war with Iran to how long a government shutdown will last, raising necessary questions about the use of inside information.”
Insider Information. Threats to National Security and Profiteering
Many lawmakers have called for the end of prediction markets that are based on outcomes that parties may know the result of ahead of time, as well as the suspension of markets that offer outcomes on death, war, and crime – the DEATH BETS Act by Rep. Mike Levin.
Fellow lawmakers have been even more aggressive in their stance against the market, with Sen. Adam Schiff and Sen. John Curtis filing a bill called the Prediction Markets Are Gambling Act, which seeks to prohibit sporting event contracts altogether.
