S. 4188: Public Integrity in Financial Prediction Markets Act of 2026

This bill, titled the Public Integrity in Financial Prediction Markets Act of 2026, seeks to regulate the engagement of certain government officials in prediction market contracts. Prediction markets are platforms where individuals can place bets on the outcome of future events. The main components of the bill are outlined below:

1. Definition of Covered Individuals and Transactions

The bill defines "covered individuals" as:

• The President
• The Vice President
• Members of Congress
• Employees of the House of Representatives or the Senate
• Political appointees
• Employees of executive agencies or independent regulatory agencies

A "covered transaction" refers to the purchase, sale, or exchange of any prediction market contract, which can be any financial instrument tied to future events, regardless of where the platform is located.

2. Prohibition on Use of Nonpublic Information

The bill prohibits covered individuals from using "material nonpublic information" that they might gain through their official positions for personal gain in prediction markets. Material nonpublic information is defined as information that is not available to the public and would be considered important by a reasonable investor when making decisions about prediction market contracts.

3. Penalties for Violations

If a covered individual violates this prohibition, they would face a fine that could be as much as:

• $500, or
• Double the profit made through the covered transaction.

All penalties collected would be deposited into the U.S. Treasury.

4. Responsibilities of Supervising Ethics Offices

Supervising ethics offices are required to:

• Implement and collect penalties for violations.
• Establish procedures and forms for compliance.
• Work with the Commodity Futures Trading Commission to issue rules and guidelines.
• Publish all related procedures and rules on a website.

5. Reporting Requirements

Covered individuals must report any covered transaction valued over $250 to their supervising ethics office within 30 days. The report must include details such as:

• The value and nature of the prediction market contract.
• The date and time of the transaction.
• The prediction market platform used.
• The profit or loss from the transaction upon its closure or exit from the position.

6. Implementation Timeline

The bill stipulates that supervising ethics offices must start implementing the outlined measures within 180 days following its enactment.

Relevant Companies

None found