In brief
- Rep. Torres proposed the Public Integrity in Financial Prediction Markets Act to keep federal officials off prediction markets.
- The bill follows controversy over a Polymarket trader winning a bet on Venezuelan President Nicolás Maduro’s removal, placed mere hours before his capture.
- Former House Speaker Nancy Pelosi is among 30 House members supporting the bill alongside Torres.
Rep. Ritchie Torres (D-NY) and 30 of his House of Representatives colleagues, including Former House Speaker Nancy Pelosi (D-CA), are making a push to ban government officials from accessing prediction markets.
The lawmakers introduced new legislation, the Public Integrity in Financial Prediction Markets Act of 2026, on Friday morning.
The bill would stop lawmakers and their staff from participating in prediction markets. In the context of the bill, that would include all federal elected officials, political appointees, and employees of the House of Representatives, Senate, and other executive agencies.
The bill argues that D.C. insiders should be blocked from participating in markets when they possess “material non-public information” about a market or the ability to influence its outcome.
The term is borrowed from securities law and is used to stop people with insider information about a company from trading securities. Prediction markets and the companies that offer them, like Kalshi and Polymarket, have so far been exclusively regulated by the Commodities and Futures Trading Commission.
Earlier this week, Polymarket faced scrutiny after a trader won more than $400,000 on a bet that Venezuelan President Nicolás Maduro would be removed from office before the end of the month. Criticism focused on the timing of the bet, which appeared just hours before U.S. special forces apprehended Maduro.
“The most corrupt corner of Washington, D.C. may well be the intersection of prediction markets and the federal government—where insider trading and self-dealing are no longer imagined risks but demonstrated dangers,” said Rep. Torres, in a statement. “We ignore this plain-sight corruption at our own peril.”
Torres, Pelosi, and their House colleagues aren’t the only ones crying foul over what appears to be unfair predictions placed by people with insider knowledge in D.C..
Sen. Chris Murphy (D-CT) included a clip of a recent White House press conference in his own criticism of allowing elected officials access to bet on markets that they can directly influence.
The clip shows the last 30 seconds of a White House press conference, and a timer showing that the event concluded right before it had lasted 1 hour and 5 minutes—which created a huge windfall for predictors who bet against the press conference lasting 65 minutes.
“Who cares about the length of a press conference? What idiot is betting on that?” he wrote on X. “But we should definitely care that there are markets that give incentives to people with power to change outcomes so they or people they know can get rich on a big bet. It’s insane we allow this.”
Loxley Fernandes, the CEO and co-founder of Dastan—which owns prediction protocol Myriad and also an editorially independent Decrypt—argued that participation from insiders is more of a feature than a bug.
“Academically speaking, prediction markets are one of the most effective tools for rooting out inside information and maximizing the efficiency and speed of information transmission,” he said earlier this week.
While he does consider insider trading to be a problem, he does take issue with the comparison between prediction markets and traditional gambling. “To date, we have looked at modern prediction markets as alternative casinos—and I believe this framing is incorrect,” he added.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Source: https://decrypt.co/354167/should-politicians-use-prediction-markets-house-bill-proposes-ban
