Senate Draws the Line: Insider Bets on Prediction Markets Are a "No Go"

A bipartisan squad of four senators—Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff—has unveiled the Public Integrity in Financial Prediction Markets Act of 2026. The proposed law essentially tells federal officials, "Hands off the degen plays," prohibiting them from using insider info to trade on any prediction market, whether it's based in the U.S. or overseas. It's the legislative equivalent of putting a parental lock on the political betting terminal.

The bill defines "material nonpublic information" in a way that would make any SEC lawyer nod approvingly: it's any info a reasonable person would consider important for a prediction-market trade that isn't out in the public domain. The penalty for getting caught playing with this privileged data is a financial slap: fines equal to double their profit or at least $500, whichever stings more. Any trade over $250 must be reported to an ethics office within 30 days, requiring a full confession of the contract, price, platform, and whether they made a bag or took an L.

The cast of characters covered by this ban is extensive, like a who's who of Washington power. It includes the President, Vice President, every member of Congress, their staffers, political appointees, and employees across executive agencies and independent regulators. Senator Young stated, "Recent activity in prediction markets has raised real concerns that individuals with access to sensitive, nonpublic information could exploit that advantage for financial gain," framing the bill as a necessary shield for taxpayer interests. In short, they're trying to prevent the government from becoming its own best-informed betting pool.

Not to be outdone, a companion bill in the House, dubbed the PREDICT Act, has been filed by Representatives Adrian Smith and Nikki Budzinski. This version goes a step further, extending the ban to the officials' spouses and dependents—no family-team betting allowed. It also proposes a 10% fine on the transaction value plus full disgorgement of any profits back to the Treasury, ensuring any wins are promptly recycled into the public coffers.

These proposals are part of a growing legislative pile, joining other bills with names like the DEATH BETS Act, the Prediction Markets Security and Integrity Act, and the Prediction Markets Are Gambling Act. Together, they signal a bipartisan consensus to start tightening the regulatory screws on insider trading within prediction markets, moving from a wild west to a more monitored frontier.