- Rep. Adrian Smith (R-NE) and Rep. Nikki Budzinski (D-IL) introduced the PREDICT Act on March 25, targeting federal officials, their spouses, and dependents who trade on platforms such as Kalshi and Polymarket.
- Violations would carry a civil penalty of 10% of the transaction value plus full disgorgement of profits to the U.S. Treasury.
- A Harvard Law study screening 93,000 Polymarket markets flagged approximately US$143 million in estimated anomalous profits across more than 210,000 suspicious wallet-market pairs.
A bipartisan bill introduced on March 25 would bar senior federal officials and their families from trading on prediction markets linked to political events or government actions.
This comes as lawmakers respond to growing evidence of informed trading on platforms such as Kalshi and Polymarket.
The PREDICT Act, introduced by Representative Adrian Smith, a Nebraska Republican, and Representative Nikki Budzinski, an Illinois Democrat, would apply to members of Congress, the president and vice president, political appointees, senior executive branch officials above GS-15, military officers at O-7 and above, and judicial officials.
Spouses and dependent children would also be covered. Smith said public service should not become a way to profit from privileged information.
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Evidence of Suspicious Trading
Six newly created Polymarket wallets made about US$1.2 million (AU$1.74 million) before the Feb. 28 U.S.-Israeli strike on Iran.
One account bought “Yes” shares at US$0.10 when the implied probability was 17% and later made about US$553,000 (AU$801,850), with the first trade placed 71 minutes before the news became public.
In another case, an account turned US$38,500 (AU$55,825) into about US$485,000 (AU$703,250) on contracts tied to the capture of Nicolas Maduro, as Crypto News Australia reported.
Israeli authorities have also indicted a civilian and an IDF reservist for allegedly using classified wartime information on Polymarket.
They Really Want to Ban Prediction Markets
The PREDICT Act is one of at least six prediction-market bills introduced in Congress in March 2026.
Other proposals range from limits on political event contracts to broader bans on event contracts involving elections, military action, and government decisions. The Commodity Futures Trading Commission began a formal review of event-contract rules on March 12.
The bill faces an uncertain path in a Republican-controlled Congress, especially as the Trump administration and CFTC Chair Mike Selig have backed what they describe as lawful innovation in prediction markets.
Budzinski said the measure is intended to close a gap left by the STOCK Act, which does not directly address this market.
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