Lawmakers Introduce Second Bill Targeting Prediction Market Insider Trading
A bipartisan group of senators launched the Public Integrity in Financial Prediction Markets Act of 2026 on Thursday, prohibiting authorities officers from utilizing nonpublic data to commerce prediction-market contracts and imposing fines equal to twice the income earned. It is the second prediction market invoice launched this week alone. That cadence isn’t a coincidence. It is a coordinated legislative sign.
The invoice covers the president, vp, members of Congress, political appointees, and workers of govt and impartial regulatory companies. Any contract wager above $250 have to be reported to a supervising ethics workplace inside 30 days, with disclosure necessities that embody worth, place, platform identify, and revenue or loss.
Congress is drawing a line round prediction markets as a brand new vector for insider buying and selling. Two payments in 5 days means that is not a fringe concern.
- Legislative Scope: The Public Integrity in Financial Prediction Markets Act covers the president, vp, all members of Congress, political appointees, and federal company workers — with obligatory reporting of any contract wager exceeding $250 inside 30 days.
- Penalty Structure: Violations carry fines as much as double the quantity of income earned, concentrating on monetary incentives immediately slightly than imposing flat regulatory penalties.
- Market Implication: Platforms like Kalshi and Polymarket — which up to date buying and selling guidelines on March 23, 2026, to ban use of confidential data — now face potential CFTC scrutiny and obligatory compliance audits if both invoice advances to markup.
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The Bill: What the Public Integrity Act Actually Prohibits
Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff launched the invoice within the second session of the 119th Congress. The laws defines insider data as something a “cheap investor would contemplate essential” in making a prediction market determination that isn’t publicly obtainable — an ordinary intentionally broad sufficient to cowl coverage information, regulatory choices, and authorities actions earlier than they’re introduced.
The reporting framework requires officers to reveal the variety of contracts bought, the value and timestamp of every transaction, the contract identify, the place taken, the buying and selling platform used, and any revenue or loss. That stage of granularity mirrors securities disclosure necessities, not informal wagering oversight.
Senator Slotkin framed the invoice sharply: “No one ought to be profiting off the knowledge and information gained as a public servant, interval.” She added the invoice “has actual tooth to make sure those that break these guidelines face actual penalties.” The double-profit penalty construction is designed to eradicate any monetary logic behind the violation.
This invoice follows the PREDICT Act, launched March 25, 2026, by Reps. Nikki Budzinski (D-IL) and Adrian Smith (R-NE), which imposes civil penalties of 10% of the transaction worth plus full disgorgement of income to the U.S. Treasury. The PREDICT Act extends buying and selling bans to spouses, dependent kids, and Executive Schedule positions — a broader private scope than the Senate invoice. Together, they cowl almost each class of federal official and their fast households.
Rep. Adrian Smith summarized the bipartisan rationale: “Our commonsense, bipartisan invoice will give Americans confidence that the choices of their elected officers are guided by advantage, not private revenue.” Both payments particularly goal platforms, together with Kalshi and Polymarket, which have emerged because the dominant U.S.-accessible prediction market venues.
The Curtis-Schiff Senate effort, launched earlier this week, additionally launched a companion measure concentrating on sports activities betting contracts on prediction platforms, a 3rd legislative prong operating parallel to the insider buying and selling focus. That broader sweep suggests Congressional intent extends past political occasion markets into the complete prediction market class.
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