Prediction markets such as Kalshi and Polymarket are coming under scrutiny as they gain popularity, and members of Congress have introduced a number of bills in recent weeks to rein them in.
The markets, which allow users to wager money on event contracts for things ranging from sports games to geopolitics, have been criticized recently over accusations of insider trading. Some states have sued them over the claim that the contracts are akin to gambling and skirt gaming laws.
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And on Capitol Hill, several lawmakers are now looking to put restrictions on various types of prediction markets. Here is a look at some of the legislation in play.
Public Integrity in Financial Prediction Markets Act
The Public Integrity in Financial Prediction Markets Act of 2026 was one of the first bills introduced in the wake of insider trading claims. It is sponsored by Rep. Richie Torres (D-NY) and, as of this week, has 42 Democratic co-sponsors.
The legislation came after some claimed that a Polymarket user capitalized on the Jan. 3 capture of Venezuelan dictator Nicolas Maduro and conducted insider trades. The user’s account was created in December 2025 and only bet on four Venezuela-related contracts, shelling out more than $30,000 and winning over $400,000.
“My team and I were thinking about it for a while, but the impetus was the anonymous trade,” Torres told the Washington Examiner about his legislation.
The bill would specifically bar lawmakers, political appointees, executive branch employees, and congressional aides from trading prediction market contracts “tied to government policy, government action, or political outcomes when they possess material nonpublic information or could reasonably obtain such information through their official duties,” according to his office.
Torres said the prediction markets could facilitate corruption at the highest levels.
“If you’re both a government insider and a participant in the prediction market, you now have a perverse incentive to push for policies that will line your pockets, and that kind of self-dealing is the very definition of corruption,” Torres said.
BETS OFF Act
The Banning Event Trading on Sensitive Operations and Federal Functions was introduced this month by Rep. Greg Casar (D-TX) and is supported by Sen. Chris Murphy (D-CT) in the Senate. It goes a bit further than Torres’s legislation.
The bill would prohibit multiple kinds of prediction market trades. For instance, it would ban trading on categories of events that include terrorism, assassinations, and war.
It would also apply to any event that is not financial, commercial, or economic if it is a government action, someone knows the outcome of the event in advance, or if a person has complete control over the outcome of the event.
In a news release, the lawmakers used the example of a market for when the late Ayatollah Ali Khamenei would be “out” as Iran’s supreme leader as an instance in which the law would apply. Also, betting on the Academy Awards would be prohibited because the result would already be known to certain people.
The legislation also targets offshore prediction markets, which are not regulated by the Commodity Futures Trading Commission, by shutting down payment systems used by illegal online platforms through amending existing laws on illegal gambling. It would also impose criminal penalties on those in the United States involved in operating or managing such offshore platforms.
“There’s no getting around the fact that any prediction market where somebody knows or controls the outcome of a bet is ripe for corruption,” Murphy said. “Even worse, prediction markets are also an avenue by which government decisions get influenced by who’s making money off them, and that should be unforgivable to the American public.”
End Prediction Market Corruption Act
The End Prediction Market Corruption Act is a bit more straightforward and aims to stop insider trading by the highest officials in the U.S. That effort is being spearheaded by Sens. Jeff Merkley (D-OR) and Amy Klobuchar (D-MN).
The legislation is a bit less involved than other, more comprehensive prediction market legislation and would outright ban the president, the vice president, and members of Congress from trading event contracts on platforms such as Kalshi and Polymarket. Executive branch officials would be banned from markets that they could influence.
The Merkley-Klobuchar bill is supported by Public Citizen, Citizens for Responsibility and Ethics in Washington, and Project On Government Oversight.
“When public officials use non-public information to win a bet, you have the perfect recipe to undermine the public’s belief that government officials are working for the public good, not for their own personal profits,” Merkley said. “Perfectly timed bets on prediction markets have the unmistakable stench of corruption.”
Prediction Markets Are Gambling Act
The Prediction Markets Are Gambling Act is being led by Sens. John Curtis (R-UT) and Adam Schiff (D-CA). The bill is a bit different in that it goes after sports contracts, the subject of litigation by state governments.
Prediction markets have waded into sports contracts, which some states assert are structurally similar to gambling, and that state gaming laws, not the CFTC, have authority over them. The Curtis-Schiff bill would ban prediction contracts that resemble sports bets or casino-style games.
Kalshi and Polymarket have dozens of markets on sports betting, where people can wager on event contracts for individual games and entire tournaments such as March Madness.
The bill also targets contracts on “casino-style games,” which the legislation defines as “any game traditionally found in a casino, including slot machine games, video poker, blackjack, roulette, craps, any other casino-style table game, bingo, lottery, and any simulation of any of those games.”
“Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators,” Curtis said. “Our bipartisan legislation clarifies regulatory jurisdiction, ensuring that states can maintain their authority over sports betting and casino gaming.”
Notably, the CFTC has pushed back on state efforts to go after such contracts. The CFTC recently waded into the battle, with the agency filing an amicus curiae, or friend-of-the-court, brief in federal court emphasizing the commission’s federal role in regulating prediction markets.
STOP Corrupt Bets Act
The STOP Corrupt Bets Act is being led by Merkley and Rep. Jamie Raskin (D-MD). It would be more sweeping than some of the other prediction market legislation.
It explicitly bans event contracts on elections and their outcomes, most government actions across all branches of government, sports, and military actions by the U.S. or other foreign nations.
Additionally, the lawmakers said in a news release that the legislation clarifies that such markets are already against the existing intent of the Commodity Exchange Act and that the CFTC “must enforce and prevent any market that doesn’t have a commercial hedging value to prevent federal gambling.”
The bill would further require the Government Accountability Office to conduct a study into prediction markets, the impacts on children, and how Congress can help prevent illegal offshore gambling.
“The oligarchs and opportunists are using prediction markets like Kalshi and Polymarket to enrich themselves,” Raskin said. “But democracy isn’t about insider gambling on our common future, it’s about everyone making it together. Placing bets on public policy and political events informed by insider knowledge spreads civic cynicism and distrust in our democratic institutions.”
It is also worth noting that at least one lawmaker has explicitly banned his staff from using prediction markets.
ACCUSATIONS OF INSIDER TRADING ON MADURO OPERATION BRING PREDICTION MARKETS IN FOCUS
Last week, Rep. Seth Moulton (D-MA) announced on X that he has implemented an office-wide policy prohibiting staff from making trades on platforms such as Kalshi and Polymarket.
“Prediction markets have become a playground for corrupt insiders who are able to place bets on things like election outcomes, wars, and even the deaths of public figures,” Moulton said in a statement. “This is creating a perverse incentive structure that poses a genuine threat to American society today.”
