Congress Proposes Prediction‑Market Rules After Scandal
SkimNews Take
The rapid legislative response to prediction market scandals suggests a pattern where policymakers prioritize containing perceived threats from new technologies over fostering their potential for innovation.
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- Congress has introduced more than a dozen prediction‑market regulatory bills in 2026, none of which have progressed to law, according to the Congressional Research Service.
- Rep. Ritchie Torres (D‑NY) unveiled the Campaign Funds Integrity Act of 2026, banning the use of campaign funds for prediction‑market bets and directing the Federal Election Commission to issue guidance and refer violations to the Department of Justice.
- A $30,000 bet on Venezuelan leader Nicolas Maduro’s capture in January sparked a scandal, and a U.S. soldier was later charged with using classified information to profit over $400,000 from a prediction‑market wager.
- Kalshi and the U.S. Senate have taken steps to curb insider trading on prediction markets, while reports show political candidates and staffers placing bets with material non‑public information.
- Rep. Jamie Raskin introduced a proposal to ban prediction markets tied to war, deaths, sports, politics, and the military, indicating a broader legislative push.
- Sen. Jeff Merkley co‑sponsored a sweeping ban on prediction markets related to sports, politics, and the military, expanding the scope of proposed restrictions.
- The Trump administration has resisted tighter regulation of prediction markets, reducing the likelihood that any of the proposed bills will become law.
Why it matters: The push for regulation targets campaign‑fund misuse and insider trading, protecting voters and preserving market integrity, while campaign officials and prediction‑market operators face potential criminal penalties and stricter oversight; the administration’s resistance means the reforms may stall, preserving the status quo for current market participants.
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