Lawmakers in the House want to limit how government employees use prediction markets, especially after the controversy around the arrest of Venezuelan President Nicolás Maduro.

A bill came forward in the United States to stop federal officials from using secret knowledge to bet on prediction markets. People buy and sell small contracts on the chances of future events on prediction markets. Rep. Ritchie Torres from New York introduced the bill in the House of Representatives and said that trust in public matters is essential in a democracy. Reports came and said one user on a platform made more than $400,000 by betting on a question linked to the possible removal of Nicolás Maduro in Venezuela. This profit happened before a US forces operation became known. The sudden gain raised fears about traders having early knowledge not owned by normal citizens.

Torres said this case shows the aim of the law. He added that secret knowledge held by workers can give unfair power in trades. Many people watched and said danger feels real already.

Rules in the Proposal

The bill, named the Public Integrity in Financial Prediction Markets Act of 2026, has the goal of stopping government workers from trading when they have inside information. Inside information means details not known by most people and not made public. The rules cover times when a person has secret knowledge and also times when a job can give access to such knowledge. Supporters said coverage matters because some workers stand close to discussions that can bring secret details at any moment.

The proposal covers elected members, political appointees placed by the president and other officials, and executive branch workers inside federal offices and departments. The bill said these people must avoid prediction markets when secret information sits in play. Torres and supporters said public service asks people to act for the country and not chase money. Trust can fall if the public sees workers gain large sums from bets before events. The bill tries to stop that door from opening more.

Market Activity Sparks Attention

The push for new legislation arrived days after a surge in prediction market betting that got wide attention. Users on Polymarket placed large wagers on a question about the removal of Maduro. Reports said users placed tens of millions of dollars on that topic, with $56.6 million placed on Polymarket alone. A regulated platform named Kalshi also saw trading on related questions. Numbers from both platforms together showed total wagers tied to Maduro at about $64.3 million. This stood as one of the largest moments of focused betting on a single international political event in recent US prediction market activity.

Observers saw one account that stood out. The account started in December, belonged to a person not public, and placed $32,537 into the market. When the event came true, that account made more than $400,000 and stirred questions about special information. Not all bets linked to the situation paid money back to traders. Polymarket said publicly it would not count the event as a US invasion of Venezuela. The platform said the United States did not invade the country and contracts tied to the invasion would not be rewarded.

Not Everyone Is Against Insider Trading

The sharp profit made by an unknown user led to debate about insider trading rules for prediction markets similar to stock markets. Some people in the prediction market world argued that inside knowledge should not be seen as a danger. They said real information in bets helps markets show better odds. Observers inside the industry shared comments backing that view. They said trades from people with more knowledge push the price closer to the truth. For them, this process makes prediction markets smarter.

Some early and experienced members of prediction markets shared the same idea. These pioneers spoke without names and told a publication that such trading does not harm the market system. They said that as long as the market stays open to everyone, price movement can reflect useful knowledge. The view stays far from universal. Critics disagreed strongly. They warned that allowing public workers to use secret information for profit can damage public faith in financial markets and government. They said the problem grows serious when bets link to issues like foreign policy or national security. Critics said trust is too important to risk when the safety of the nation is at stake.