In response to suspicious activity surrounding the capture of Venezuelan leader Nicolás Maduro, lawmakers are pushing legislation to prevent government insiders from profiting on prediction markets.
Rep. Ritchie Torres (D-NY) introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would bar federal elected officials, political appointees, executive branch staff, and congressional employees from trading prediction market contracts linked to government actions if they possess material nonpublic information or could reasonably access it through their official duties.
“No elected official is elected to profit from office. Government is a public trust, not a for-profit enterprise,” Torres said. “We ignore this plain-sight corruption at our own peril.”
Maduro Betting Raises Alarm
The legislation comes after a new account on Polymarket reportedly placed over $30,000 on Maduro being removed from office by the end of January, only for him to be captured hours later. The user allegedly collected a $400,000 payout, sparking concerns of insider knowledge influencing the trade.
The bill has gained 30 Democratic co-sponsors, including Rep. Dina Titus (D-NV), who publicly demanded answers from Polymarket’s CEO about the safeguards in place to prevent insider trading and ensure fair market operation.
“I have serious concerns about Polymarket’s ability and willingness to comply with CFTC regulations,” Titus said in a public statement.
Insider Trading Concerns in Prediction Markets
Legal experts warn that insider trading in prediction markets could undermine public trust. Melinda Roth, associate professor at Washington & Lee University School of Law, said:
“Using material nonpublic information to trade event contracts is wrong, just as it is in any financial market. These markets must remain free of insider advantage, including by government officials.”
Polymarket has faced prior scrutiny, including an incident in December where a user won 22 of 23 bets in a single day, earning over $1 million. Industry regulations remain sparse, with terms of service not explicitly covering insider trading, prompting increased attention from both state and federal regulators.
Major betting operators, including Fanatics, FanDuel, and DraftKings, have recently entered the prediction market space, further raising questions about oversight and market integrity.
This bill represents the latest effort to protect prediction markets from misuse by those with privileged government information, aiming to maintain trust and fairness in this growing segment of financial speculation.
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