Legislators Target Prediction Markets After Insider Trading Scandals
Congress is scrambling to impose new regulatory measures on online prediction markets following a series of alleged insider trading incidents. More than a dozen bills have been introduced this year to address the issue, but none have made substantial progress toward becoming law.
The latest proposal comes from Rep. Ritchie Torres (D-N.Y.), whose bill seeks to ban the use of campaign funds for betting on prediction markets. The legislation, titled the Campaign Funds Integrity Act of 2026, would impose criminal penalties, including up to five years in prison, for violations. The Federal Election Commission would be tasked with enforcing the ban and referring violators to the Department of Justice.
This bill aims to close a loophole that could allow campaign funds to be misused for speculative betting.
Several high-profile cases have fueled the push for regulation, including a $30,000 bet on the capture of former Venezuelan President Nicolas Maduro and a U.S. soldier charged with profiting $400,000 using classified information. Reports of political candidates and campaign staffers placing bets on markets related to their work have further heightened concerns.
Other proposed bills take broader approaches, such as prohibiting prediction markets tied to war or the deaths of individuals. Rep. Jamie Raskin (D-Md.) and Sen. Jeff Merkley (D-Ore.) have introduced legislation seeking a total ban on prediction markets related to sports, politics, and the military.
Despite growing momentum for regulation, the Trump administration has resisted strict measures, reducing the likelihood of major legislative changes in the near term.