Effort comes after reports of individuals suspiciously earning massive payouts before Iran Strikes, Venezuela Military Actions
Washington, D.C. – Today, Oregon’s U.S. Senator Jeff Merkley and Minnesota’s U.S. Senator Amy Klobuchar launched a new effort to prevent government officials at the highest levels from engaging in prediction markets, cracking down on the potential for any insider trading.
Following multiple public reports on the growing influence of prediction markets and their potential for corruption, Merkley and Klobuchar introduced the End Prediction Market Corruption Act—a new bill to ban the President, Vice President, Members of Congress, and other public officials from trading event contracts. The bill will ensure that federal elected officials maintain their oath of office to serve the people by preventing them from trading on information that they gained through their role.
“When public officials use non-public information to win a bet, you have the perfect recipe to undermine the public’s belief that government officials are working for the public good, not for their own personal profits,” said Merkley. “Perfectly timed bets on prediction markets have the unmistakable stench of corruption. To protect the public interest, Congress must step up and pass my End Prediction Market Corruption Act to crack down on this bad bet for democracy.”
“At the same time that prediction markets have seen huge growth, we have seen increasing reports of misconduct. This legislation strengthens the Commodity Futures Trading Commission’s ability to go after bad actors and provides rules of the road to prevent those with confidential government or policy information from exploiting their access for financial gain,” said Klobuchar.
Merkley and Klobuchar’s End Prediction Market Corruption Act is cosponsored by U.S. Senators Chris Van Hollen (D-MD), Adam Schiff (D-CA), and Kirsten Gillibrand (D-NY).
Their bill is supported by Public Citizen, Citizens for Responsibility and Ethics in Washington (CREW), and Project On Government Oversight (POGO).
“The American people deserve unwavering ethical standards from their government officials. Officials have a responsibility to avoid not only actual conflicts of interest but even the appearance of impropriety. POGO is pleased to endorse the End Prediction Market Corruption Act, which will further prohibit covered government officials from exploiting nonpublic information for personal gain in prediction markets,” said Janice Luong, Policy Associate for the Project On Government Oversight (POGO).
“It is now more important than ever that prediction markets be governed by ethical constraints, especially when it comes to bets placed by governmental officials. Sen. Merkley’s legislation would appropriately prohibit key government officials from buying or selling on the prediction markets contracts in which they could have insider information on changes in the market. Public Citizen heartily endorses this bill,” said Craig Holman, Ph.D., Public Citizen.
“The rapid rise of retail prediction markets creates the risk that officials across the government could use nonpublic information to trade on and profit off event contracts,” said Debra Perlin, Vice President of Policy of Citizens for Responsibility and Ethics in Washington (CREW). “The American people must be able to trust that their government officials are working on their behalf rather than for personal gain. Senator Merkley’s legislation represents a vital step forward to ensure that those in positions of power, including senior executive branch officials and members of Congress, cannot abuse their access to nonpublic information in order to profit.”
Merkley has been a long-time leader in the push to end public corruption. He has led the charge to crack down on election gambling and dark money in politics, prevent lawmakers from trading stocks, and ban cryptocurrency-related corruption by elected officials at the highest levels of the federal government.
Full text of the End Prediction Market Corruption Act can be found by clicking here.
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