In light of suspicious betting activity around the capture of Venezuelan leader Nicolás Maduro, federal lawmakers are looking to limit government officials’ use of prediction markets.
Rep. Ritchie Torres, D-NY, proposed the Public Integrity in Financial Prediction Markets Act of 2026. The bill prohibits federal elected officials, political appointees, executive branch employees, and congressional staff from buying, selling, or exchanging prediction market contracts tied to government policy when they possess “material nonpublic information or could reasonably obtain such information through their official duties,” according to a statement from Torres.
“The most corrupt corner of Washington, D.C. may well be the intersection of prediction markets and the federal government – where insider trading and self-dealing are no longer imagined risks but demonstrated dangers,” Torres said. “We ignore this plain- sight corruption at our own peril.
“No elected official is elected to profit from elected office. Government is not a for-profit enterprise; it is a public trust. It does not belong to the elected officials. It belongs to the people who elect them.”
Six-figure Payout On Capture
The bill follows allegations of possible insider trading on Polymarket related to Maduro’s capture. Reports surfaced last week that a new account on the platform placed a bet of more than $30,000 that Maduro would be removed from office by the end of January.
Maduro was taken into custody a few hours later. The user scored a $400,000 payout. That raised suspicion that the trader had inside knowledge of the administration’s planned operation.
Torres’ bill has received support from 30 House Democrats as co-sponsors of the bill. It includes Rep. Dina Titus of Nevada. She released a letter to Polymarket last week demanding answers on the Maduro scenario.
In light of recent betting activity surrounding the capture of President Nicolás Maduro, I have serious concerns about @Polymarket’s ability, and willingness, to comply with @CFTC regulations.
I am demanding answers from Polymarket CEO @shayne_coplan regarding the safeguards… pic.twitter.com/fHpjLpsykG
— Dina Titus (@repdinatitus) January 9, 2026
“In light of recent betting activity surrounding the capture of President Nicolás Maduro, I have serious concerns about Polymarket’s ability, and willingness, to comply with CFTC (Commodity Futures Trading Commission) regulations,” she noted on X.
“I am demanding answers from Polymarket CEO Shayne Coplan regarding the safeguards his company has in place to prevent insider trading and ensure that its markets operate fairly and transparently.”
Concerns About Insider Trading Continue
Melinda Roth is an associate professor at Washington and Lee University School of Law. She said “insider trading” could erode public confidence in prediction markets. Torres’ effort could help curtail this kind of activity among federal employees.
“Using material nonpublic information to buy, sell, or trade event contracts is wrong, just as it is wrong for any other financial investment,” she said. “Event contracts are an emerging asset class in the growing prediction markets, and these markets must be free of any insiders (including government officials or employees, whether elected or appointed) using material nonpublic information to gain an informational advantage in this marketplace.”
This isn’t the first time Polymarket betting has brought suspicion of insider trading. A similar incident occurred in December. A user won 22 of 23 bets on the platform for more than $1 million in a single day.
Yahoo Finance noted that the company’s terms of service don’t cover insider trading. Operators have also faced increased scrutiny from state gaming regulators. Lawmakers in D.C. recently circulated a draft letter criticizing the industry and pointing to a lack of consumer protections.
Some major sportsbooks responded by getting in on the action. Fanatics launched a prediction market operation in December, and FanDuel and DraftKings also recently launched platforms.
