No More Alpha Leaks: Congress Tries to Ban Uncle Sam's Prediction Market Side Hustle

U.S. lawmakers, in a move that suggests they finally understand what a prediction market is, have rolled out their second bill this week aimed at stopping government officials from turning confidential briefings into degen plays on platforms like Kalshi and Polymarket. The bipartisan Public Integrity in Financial Prediction Markets Act of 2026, brought to you by Rep. Todd Young, Rep. Elissa Slotkin, Rep. John Curtis and Rep. Adam Schiff, seeks to make “profiting off the information and knowledge gained as a public servant” a relic—right next to dial-up internet and congressional approval ratings.

The proposal would explicitly ban the president, veep, members of Congress, political appointees, and any federal agency employee from using material, non-public info to place bets on prediction-market contracts. Insider information is defined broadly as anything a reasonable degen would consider crucial alpha for a contract decision, provided that alpha hasn't already been leaked on a crypto Twitter Space.

If a covered official decides to risk more than $250 on a contract—roughly the cost of a nice dinner in D.C.—they must report the trade within 30 days to their ethics office. The disclosure must include the number of contracts, price, date and time, contract name, position taken, platform used, and any resulting profit or loss, because transparency is key when you're basically front-running the public.

Violations would be punished with a fine of the greater of $500 or double the profit earned from the bet. Slotkin highlighted the bill’s “real teeth,” calling it a “common-sense” and “important first step” to protect public integrity, presumably before someone tries to bet on the outcome of the ethics investigation itself.

This act follows the PREDICT Act, introduced just days earlier by Rep. Adrian Smith and Rep. Nikki Budzinski, which also targets insider trading on political-event markets. Together, the bills reflect a growing political panic that prediction markets could become Washington's newest, most efficient grift, surpassing even traditional lobbying.

Not to be out-regulated, platforms Kalshi and Polymarket have already started tightening their own rules to deter insider wagering. The legislative one-two punch signals a broader trend of officials finally taking aim at prediction-market abuse, a frontier they discovered only slightly after the rest of the internet.