BREAKING: Lawmakers Target Prediction Market Insider Trading with Second Bill in One Week

WASHINGTON, March 28, 2026 – In a sharp legislative warning to crypto and prediction markets, a bipartisan Senate group today introduced the Public Integrity in Financial Prediction Markets Act of 2026, directly prohibiting government officials from trading on nonpublic information. The bill, the second such proposal this week, signals a coordinated crackdown and mandates heavy fines of double any illicit profits. Covered officials—including the President, Vice President, Congress members, and agency employees—must now report all contract wagers above a set threshold within 30 days, disclosing platform, position, and P&L details, drawing a firm regulatory line around emerging prediction markets.

The Bill: What the Public Integrity Act Actually Prohibits

Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced the bill in the second session of the 119th Congress. The legislation defines insider information as anything a “reasonable investor would consider important” in making a prediction market decision that is not publicly available — a standard deliberately broad enough to cover policy knowledge, regulatory decisions, and government actions before they are announced.

The reporting framework requires officials to disclose the number of contracts purchased, the price and timestamp of each transaction, the contract name, the position taken, the trading platform used, and any profit or loss. That level of granularity mirrors securities disclosure requirements, not casual wagering oversight.

Senator Slotkin framed the bill sharply: “No one should be profiting off the information and knowledge gained as a public servant, period.” She added the bill “has real teeth to ensure those who break these rules face real consequences.” The double-profit penalty structure is designed to eliminate any financial logic behind the violation.

This bill follows the PREDICT Act, introduced March 25, 2026, by Reps. Nikki Budzinski (D-IL) and Adrian Smith (R-NE), which imposes civil penalties of 10% of the transaction value plus full disgorgement of profits to the U.S. Treasury. The PREDICT Act extends trading bans to spouses, dependent children, and Executive Schedule positions — a broader personal scope than the Senate bill. Together, they cover nearly every category of federal official and their immediate households.

Rep. Adrian Smith summarized the bipartisan rationale: “Our commonsense, bipartisan bill will give Americans confidence that the decisions of their elected officials are guided by merit, not personal profit.” Both bills specifically target platforms, including Kalshi and Polymarket, which have emerged as the dominant U.S.-accessible prediction market venues.

The Curtis-Schiff Senate effort, introduced earlier this week, also introduced a companion measure targeting sports betting contracts on prediction platforms, a third legislative prong running parallel to the insider trading focus. That broader sweep suggests Congressional intent extends beyond political event markets into the full prediction market category.