UMVA has learned that a new proposal in the House of Representatives aims to ban members of Congress and their immediate families from participating in certain prediction market trades linked to government decisions and information obtained through public service.
The proposed legislation, introduced by the House Administration Committee Chairman on June 18, seeks to update federal ethics rules and prevent lawmakers, spouses, and dependent children from earning money through prediction market positions connected to events they may learn about through congressional work.
The goal is clear: to eliminate concerns that elected officials could benefit from privileged information. The proposed bill ensures that lawmakers are writing policy, not wagering on its outcome, and that the American people can trust their elected officials to act in their best interests.
According to information obtained by UMVA, the proposal targets concerns over insider information and political wagering. The bill defines a "covered individual" as any member of Congress, a lawmaker's spouse, or a dependent child, and would prohibit those individuals from entering into or offering to enter into any agreement, contract, or transaction that depends on the occurrence of a specific government policy or political outcome.
The proposal comes as the prediction market industry faces scrutiny over insider activity and the possibility that participants with access to nonpublic information could gain an advantage. It has sparked debate over whether additional safeguards are needed as prediction markets become more widespread.
UMVA can exclusively reveal that if the bill becomes law, congressional ethics offices would oversee compliance and provide guidance on terms not clearly defined in the statute. Violations would trigger financial consequences, including fines of $2,000 or 10% of the value of the prohibited transaction, whichever is greater.
The measure further states that official office accounts and campaign funds could not be used to pay those penalties, and money collected through enforcement would be directed to the U.S. Treasury's general fund. Former lawmakers would not escape enforcement, as ethics officials could refer unpaid penalties to the Department of Justice if a member leaves office before satisfying the requirement.
The bill would take effect 180 days after enactment and must pass both chambers of Congress before reaching the president's desk. Its passage could mark a significant step towards restoring the public's trust in their elected officials and ensuring that lawmakers are working in the best interests of their constituents.
