Public Integrity Bill Targets Prediction Market Trading by Federal Officials
New York Rep. Ritchie Torres is preparing to introduce the Public Integrity in Financial Prediction Markets Act of 2026.
One of the first proposals of the new year aims to restrict trading on prediction market apps by federal officials who may possess material non-public information.
The legislation would prohibit elected officials, political appointees, and executive branch employees from trading contracts tied to government policy or political outcomes when their official roles provide access to sensitive information.
A spokesman for Torres said the measure had been under development for some time but gained urgency following heightened scrutiny of recent trading activity connected to events in Venezuela.
While the bill had no co-sponsors at the time of disclosure, Torres intended to seek broader bipartisan backing in the coming weeks. The proposal emerged amid renewed debate over whether existing prediction market rules sufficiently address insider trading risks.
The announcement followed confirmation by President Donald Trump that US forces had detained Venezuelan President Nicolas Maduro after overnight military strikes in Caracas. Attention quickly focused on a Polymarket account created in late December that placed roughly $32,500 across four contracts tied exclusively to US intervention in Venezuela.
Those positions were purchased when implied probabilities were in the low single digits and resolved near $1 per share after the capture, generating profits exceeding $400,000 in less than a day.
The Wall Street Journal reported that the market began moving upward hours before Trump's public statement, fueling speculation about advance knowledge. In response to online discussion, Kalshi stated that its rules already prohibit trading on material nonpublic information by insiders or decision-makers.
NCAA opposition highlights broader regulatory tensions
The scrutiny surrounding political prediction markets followed separate resistance from college sports leadership over proposed athlete-related markets. Last month, NCAA President Charlie Baker publicly objected to Kalshi's plan to permit trading on whether college athletes would enter the transfer portal.
"The NCAA vehemently opposes college sports prediction markets," Baker said in a statement. "It is already bad enough that student-athletes face harassment and abuse for lost bets on game performance, and now Kalshi wants to offer bets on their transfer decisions and status — this is absolutely unacceptable and would place even greater pressure on student-athletes while threatening competition integrity and recruiting processes.”
Kalshi had informed federal regulators that it intended to self-certify new markets, though it stated that it did not plan to immediately launch transfer-portal trading, according to ESPN. The proposed markets would settle based on public announcements by athletes or their teams regarding portal entry or subsequent commitments.
Because prediction markets operate under federal oversight, they are accessible nationwide, unlike sportsbooks, which remain subject to individual state regulation. To date, licensed sportsbooks have not offered futures tied to transfer portal activity.
The college football transfer portal formally opened on Jan. 2, although many athletes had already declared their intentions beforehand.
