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Sens. Amy Klobuchar and Jeff Merkley have introduced the End Prediction Market Corruption Act, legislation that aims to prevent government officials from leveraging their access to insider information to trade on prediction markets. The bill has three additional co-sponsors: Sens. Chris Van Hollen, Adam Schiff and Kirsten Gillibrand.
“When public officials use non-public information to win a bet, you have the perfect recipe to undermine the public’s belief that government officials are working for the public good, not for their own personal profits,” said Merkley in a press release. “Perfectly timed bets on prediction markets have the unmistakable stench of corruption.”
The ban on event contract trading by government officials would extend to the U.S. President, Vice Presidents, members of Congress and other public officials. The penalty for violating the measure’s standards for prediction markets would be a civil penalty of at least $10,000 for each violation, levied by the U.S. Attorney General.
Earlier this year, a trader on Polymarket’s global platform pocketed more than $400,000 on the political status of Venezuelan President Nicolás Maduro before his arrest by U.S. federal authorities, raising concerns about the potential use of insider knowledge.
Earlier this week, more insider trading concerns were raised after another Polymarket trader made over $553,000 on markets related to Iran and its leadership. The trading drew the attention of lawmakers, leading to speculation about the use of insider information.
Sens. Amy Klobuchar and Jeff Merkley have introduced the End Prediction Market Corruption Act, legislation that aims to prevent government officials from leveraging their access to insider information to trade on prediction markets. The bill has three additional co-sponsors: Sens. Chris Van Hollen, Adam Schiff and Kirsten Gillibrand.
“When public officials use non-public information to win a bet, you have the perfect recipe to undermine the public’s belief that government officials are working for the public good, not for their own personal profits,” said Merkley in a press release. “Perfectly timed bets on prediction markets have the unmistakable stench of corruption.”
The ban on event contract trading by government officials would extend to the U.S. President, Vice Presidents, members of Congress and other public officials. The penalty for violating the measure’s standards for prediction markets would be a civil penalty of at least $10,000 for each violation, levied by the U.S. Attorney General.
Why did the lawmakers introduce this bill?
The bill comes amid several recent geopolitical controversies tied to event contracts.Earlier this year, a trader on Polymarket’s global platform pocketed more than $400,000 on the political status of Venezuelan President Nicolás Maduro before his arrest by U.S. federal authorities, raising concerns about the potential use of insider knowledge.
Earlier this week, more insider trading concerns were raised after another Polymarket trader made over $553,000 on markets related to Iran and its leadership. The trading drew the attention of lawmakers, leading to speculation about the use of insider information.
