Congressman Adrian Smith and Congresswoman Nikki Budzinski introduced the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act) on Mar. 25. The bipartisan bill aims to stop senior government officials from trading on insider information through prediction markets.
The legislation seeks to address concerns about potential conflicts of interest among elected officials and political appointees. Supporters say the measure will help restore public trust in government decision-making by preventing personal financial gain from sensitive information.
The PREDICT Act would prohibit Members of Congress, their spouses, dependent children, the President, Vice President, and political appointees—including those in Executive Schedule positions—from trading on outcomes of political events or policy decisions via prediction markets. “Serving the American people is a privilege, not a pathway to profit. Our commonsense, bipartisan bill will give Americans confidence that the decisions of their elected officials are guided by merit, not personal profit. I am proud to partner with Representative Budzinski to ensure that government officials do not profit from the sensitive information entrusted to them,” said Smith.
Budzinski said: “The American people are tired of politicians using their influence for personal gain, and the rise of prediction markets has made those concerns even more relevant. In recent months, we’ve seen instances of little-known traders making massive profits on events ranging from war with Iran to how long a government shutdown will last, raising necessary questions about the use of inside information. I am excited to be working with Representative Smith to close that loophole and ensure that those with access to sensitive information cannot profit from it.”
If enacted, violations would result in civil penalties equal to 10 percent of any prohibited transaction’s value as well as full disgorgement of profits earned—funds which would be paid into the U.S. Treasury.
Smith is currently serving in Congress representing Nebraska’s 3rd district after replacing Tom Osborne in 2007 according to congressional records. He previously served in Nebraska’s Legislature between 1999 and 2007 as reported by state archives. Born in Scottsbluff in 1970, Smith now lives in Gering at age 52 according to his official biography. He graduated from University of Nebraska–Lincoln with a BA degree in 1993 according to university records.
The introduction of this legislation comes amid heightened scrutiny over how policymakers may benefit financially from nonpublic knowledge gained through their official duties.
