U.S. Democrats Propose Bill to Ban Insider Betting on Prediction Markets

Democratic lawmakers in Congress have introduced new legislation aimed at preventing government officials and insiders from placing bets on prediction markets tied to sensitive events. The proposed Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act seeks to prohibit wagers on outcomes that participants may already know in advance, including military actions, terrorism, and other government decisions.

The effort is led by Chris Murphy and Representative Greg Casar, who cited concerns about potential misuse of privileged information.

Concerns Over Suspicious Pre-Event Bets

The bill follows reports of significant bets placed ahead of U.S. operations in countries such as Venezuela and Iran, raising suspicions of prior knowledge influencing market activity. Lawmakers argue that such actions could undermine market integrity and create unfair advantages.

Broader Crackdown on Prediction Market Abuse

The legislation would extend beyond government related events to include any scenario where outcomes are controlled or known in advance, such as entertainment or award results. It would also restrict regulators from listing contracts tied to these sensitive categories.

The proposal builds on earlier efforts by Ritchie Torres and Adam Schiff, signaling growing momentum to tighten oversight of prediction markets and address insider trading risks.

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