A contentious bet tied to major happenings in Venezuela has sped up work in Washington to oversee political prediction markets and stop possible misuse of inside information by government officials.
Polymarket Wagers Spark New Insider Trading Proposal
Representative Ritchie Torres is drafting a bill that would stop federal workers from betting on prediction sites when those bets involve government actions or political results. The bill, called the Public Integrity in Financial Prediction Markets Act of 2026, aims to apply long-standing rules against insider trading from regular financial markets to the booming field of event betting, as reported by Jake Sherman, the founder of Punchbowl News, on X.
The proposed legislation would cover Congress members, political appointees, and executive branch staff. The rules being considered would stop these people from buying, selling, or swapping prediction market contracts if they have inside information from their job duties. Lawmakers want to fix what they see as a gap in the rules, as prediction markets now tie in more with key policy choices and world events.
The push for the proposal gained steam after a notable trade on Polymarket this month. A new account bet about $32,000 on a contract that predicted Venezuelan President Nicolás Maduro would leave office before January 2026 ended. Soon after, news broke that US forces had caught Maduro settling the contract and making over $400,000 in profits.
Blockchain Traces and Account Issues Put Prediction Markets Under Scrutiny
People who monitor blockchain later found several digital wallets that had placed bets on the same outcome at similar times. Together, these wallets earned more than $630,000. The accounts had little to no previous trading and focused on contracts about Maduro. This pattern made some wonder if the trades were based on secret information about a military or diplomatic plan.
Prediction market operators are trying to stay out of the controversy. Kalshi says its internal rules already ban insiders or decision-makers from trading on important private information. Polymarket, on the other hand, has faced different questions after some users said their accounts were accessed without permission and their balances were emptied. The platform blamed those problems on a weak spot introduced by a third-party login service and said they had fixed the issue.
For lawmakers, this situation shows they need to consider clearer oversight. Torres’ plan would adapt parts of the STOCK Act, which controls how members of Congress trade, to prediction markets. People who support this say that without similar protections, these platforms might become tools for making money instead of places to gather what the public expects.
As prediction markets gain more clout and attention, the argument points to a bigger change in how officials see them—not as odd experiments, but as financial systems that could be misused if nobody keeps an eye on them.