US Lawmakers Crack Down: Blocking Insider Bets on Prediction Markets

Washington draws a line in the sand—lawmakers are moving to slam the door on insider trading in prediction markets. No more privileged plays.

The New Rules of the Game

Forget backroom deals. The proposed legislation aims to sever the link between non-public intel and speculative bets on future events. It targets anyone with access to sensitive government or corporate information before it hits the public domain.

Why Prediction Markets Are in the Crosshairs

These platforms let users bet on outcomes—elections, policy decisions, even corporate earnings. The fear? That insiders could use confidential knowledge to place guaranteed-winning bets, turning information asymmetry into a profit engine. It’s the ultimate unfair advantage, and regulators have finally had enough.

The Finance Sector’s Ironic Twist

Here’s the kicker—traditional finance has wrestled with insider trading for decades, yet prediction markets, a newer frontier, are getting the regulatory spotlight first. A classic case of fixing the new fence while the old wall still has holes. Some might call that bureaucratic prioritization at its finest.

The move signals a broader scrutiny of how information flows—and profits are made—in increasingly digital markets. If passed, it could reshape not just who bets, but how all speculative markets manage integrity. Game on.

Rep. Ritchie Torres has introduced a new bill aimed at banning federal officials from trading on prediction markets using non-public information. The proposal, called the Public Integrity in Financial Prediction Markets Act of 2026, comes after concerns that U.S. insiders may have profited from sensitive Venezuela-related bets. Prediction markets allow users to wager on real-world outcomes like elections, conflicts, and political changes. Lawmakers fear officials with access to classified intelligence could exploit these platforms for personal gain. The bill seeks to protect public trust by closing loopholes that could enable insider trading on geopolitical events.