PREDICT Act
- Sponsor
- Rep. Budzinski, Nikki [D-IL-13]
- Committees
- Oversight and Government Reform Committee (primary)
- Last action
- Mar 25, 2026
Bottom line
The PREDICT Act aims to enhance public trust by banning federal officials and their close associates from profiting from political outcomes through prediction markets, imposing financial penalties and transparency requirements for non-compliance.
What it actually does
This bill prohibits a wide range of federal officials, including Members of Congress, executive branch employees, judicial officers, and their immediate families and fiduciaries, from participating in prediction markets where outcomes depend on specific political events. It establishes penalties for violations, including a fee and disgorgement of profits, and mandates public disclosure of fines.
Proponents argue
Supporters argue that this bill is crucial for upholding public trust and preventing conflicts of interest by eliminating any opportunity for federal officials to financially benefit from political events they might influence or have insider knowledge about. It closes a potential loophole in existing ethics laws and ensures accountability across all branches of government.
Opponents contend
Opponents might contend that the bill is overly broad in its definition of 'covered individuals,' potentially infringing on the personal financial freedoms of individuals who have no direct access to sensitive political information. Concerns could also be raised about the ambiguity of 'specific political event' and the practical challenges of consistent enforcement.
The bill is concise and clearly written, allowing a reader to quickly grasp its core provisions and implications.
Section 1
Short Title
This section formally names the legislation the 'Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act,' or the 'PREDICT Act.' This short title provides an easily recognizable name for the bill, facilitating its reference and discussion in public and legislative discourse.
Supporters argue
Proponents argue that a clear and descriptive short title like the PREDICT Act helps communicate the bill's purpose to the public and makes it easier for legislators and the media to refer to the legislation.
Critics contend
No specific opposition is typically raised against the short title of a bill, as it is a standard legislative practice.
Tradeoffs
None.
Section 2, Subchapter IV, Section 13151(1)
Definition of 'Covered Individual'
This provision broadly defines who is subject to the new trading restrictions. It includes Members of Congress, their spouses and dependent children, their financial fiduciaries, all Congressional staff, the President, Vice President, political appointees, high-level executive branch employees (GS-15 equivalent and above, or military O-7 and above), and all judicial officers and employees. This wide scope ensures that the prohibition applies across all three branches of government and to individuals closely associated with federal officials.
Section 2, Subchapter IV, Section 13152(a)
Prohibition on Trading on Prediction Markets
This is the core prohibitory clause, stating that no covered individual can engage in any financial agreement, contract, or transaction where the outcome (purchase, sale, payment, or delivery) depends on whether a specific political event happens, doesn't happen, or how much it happens. This effectively bans participation in prediction markets related to political outcomes, aiming to prevent officials from profiting from their unique position.
Section 2, Subchapter IV, Section 13153
Penalties for Violations
If a covered individual violates the trading restrictions, they must pay a penalty equal to 10% of the value of the prohibited transaction and give up any profits made from it, with these funds going to the U.S. Treasury. The bill explicitly forbids using official government allowances (like Members' Representational Allowance), campaign contributions, or federal salary (other than the individual's own salary) to pay these penalties. Each supervising ethics office must publicly disclose details of all fines assessed, including the reason and result.
This subsection mandates that the supervising ethics office issue interpretive guidance on any relevant term not defined in the subchapter. This is crucial for practical implementation and defining the precise scope of terms like 'specific political event.'
Section 2, Subchapter IV, Section 13152(b)
Why it matters:This is standard legislative practice to delegate detailed rule-making and interpretation to expert agencies. However, it means the full practical scope of the prohibition is not immediately clear from the bill text itself and will depend heavily on future agency actions.
Case for: Proponents argue that delegating interpretive guidance allows for flexibility and expert interpretation to adapt the law to evolving financial markets and political contexts, ensuring the prohibition remains effective, practical, and responsive to new challenges.
Case against: Critics might argue that this delegation could lead to initial uncertainty for covered individuals and potential inconsistencies in enforcement until guidance is issued. It also means the final scope of the law will depend heavily on agency interpretation, potentially shifting power from Congress to the executive branch.
Estimated impact: High, as the interpretive guidance will determine the practical application and enforcement of the entire subchapter, significantly influencing how covered individuals understand and comply with the ban.
This subsection explicitly prohibits covered individuals from paying penalties for violations using official allowances (like the Members' Representational Allowance or Senators' Official Personnel and Office Expense Account), campaign contributions, or any other federal employment-related funds (excluding their personal salary).
Section 2, Subchapter IV, Section 13153(b)
Why it matters:While critical for accountability, it is a procedural detail about how penalties are *not* paid rather than how they *are* calculated. It reinforces the ethical principle that personal misconduct should not be subsidized by public or political funds.
Case for: Proponents argue this provision is vital for strengthening accountability, ensuring that federal officials bear the financial consequences of their violations personally. It prevents the use of taxpayer or donor funds to cover ethical breaches, thereby reinforcing the integrity of public service.
Case against: There is no strong public case against this provision, as it directly addresses a potential ethical loophole. Any opposition would likely be from those seeking to mitigate personal financial exposure for violations.
Estimated impact: Significant, as it prevents a potential loophole where officials could use public or political funds to mitigate personal financial penalties, thereby strengthening the deterrent effect of the penalties.