PREDICT Act

The bill adds a new subchapter to federal ethics law that focuses on prediction markets. It defines “covered individuals” to include Members of Congress, their spouses and dependent children, senior congressional staff, the President and Vice President, political appointees, certain high‑level executive branch and independent agency employees, and federal judges and judicial employees. It also covers anyone managing prediction market trades on behalf of these people, such as fiduciaries. For all covered individuals, the bill makes it illegal, while they are in federal service, to enter into or even offer to enter into any agreement, contract, or transaction whose payment or value depends on whether a specific political event happens, does not happen, or how much it happens. This is aimed at prediction markets that let people bet on political outcomes. The bill directs each supervising ethics office to issue guidance to explain any terms that are not defined in the text, so agencies can interpret and apply the rules. If a covered individual breaks this rule, the supervising ethics office must impose penalties. The person must pay a fee equal to 10 percent of the value of the improper transaction and must also give up (disgorge) any profits they made from it, with those profits paid into the U.S. Treasury. The bill also lists types of funds that cannot be used to pay these penalties, such as official office budgets, campaign contributions, and other government‑provided funds, so individuals must pay from their own salary or personal money. Finally, each ethics office must post online a description of every fine, the reason for it, and the outcome, making the enforcement actions public.

This bill is aimed at limiting the chance that high‑level federal officials could appear to profit from inside knowledge about political events or their own official actions through prediction markets. By banning these trades and requiring any profits to be returned, it seeks to separate personal financial activity from political outcomes for people in powerful positions. The bill could affect how covered officials manage their investments and financial planning, since they and certain people acting on their behalf would have to avoid political prediction markets. The required public posting of fines could increase transparency about ethics violations and how they are handled. The broader effects on prediction market platforms and on public trust in government behavior are not specified in the bill and would depend on how often these markets are used by covered officials today.