Congress Moves to Ban US Officials from Trading on Prediction Markets
Two bills were introduced in 2023 to stop US officials from trading on prediction markets. These platforms let users bet on political, legislative, and geopolitical outcomes. Critics argue they create opportunities for insiders to profit from non-public information.
The proposals arrived as concerns grew over potential conflicts of interest. No state has yet passed its own law targeting federal employees, though some have taken action against prediction market platforms in general. On 25 March 2023, two separate acts were put forward in Congress. One came from Rep. Seth Moulton (D-MA-06), who immediately banned his own staff from trading on prediction markets. His measure covers bets on political, legislative, regulatory, and geopolitical outcomes.
A second bill, the PREDICT Act, was introduced by Rep. Adrian Smith (R-NE-03) and Rep. Nikki Budzinski (D-IL-13). This proposal goes further, targeting not just lawmakers and their families but also the president, vice president, and senior appointees. Violations would carry a civil fine of 10% of the trade's value, with profits seized by the US Treasury.
Earlier efforts included Rep. Ritchie Torres's Financial Prediction Markets Public Integrity Act. That 2026 proposal aimed to close loopholes but never became law. While states like Michigan, Massachusetts, and Utah have sued prediction market operators, none have specifically banned federal officials from trading.
Supporters of these bans argue they could cut down on scandals tied to insider knowledge. However, stricter rules might also force platforms to tighten identity checks and monitoring systems.
Prediction markets themselves have faced criticism for years. Opponents claim they allow corrupt insiders to profit from policy shifts and global events before the public knows. The two 2023 bills mark the latest push to regulate prediction market trading by government officials. If passed, they would create new penalties and enforcement rules. For now, no state or federal law explicitly blocks US representatives or their staff from participating in these markets. Any changes would likely increase scrutiny on both traders and the platforms they use.
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