Draft defense bill would bar US troops from prediction market bets
A draft US defense policy bill would bar members of the military and Pentagon civilian employees from using prediction markets to bet on global events. The provision, included in the annual National Defense Authorization Act, targets concerns that service members and defense personnel could exploit classified information for profit on event-contract platforms. The restriction comes after a high-profile soldier insider betting scandal and the first coordinated DOJ-CFTC insider trading case against a US soldier. Current federal law already bars US-based prediction sites from offering markets on war, but offshore alternatives remain accessible. The bill remains in draft form and must pass both chambers of Congress before becoming law.
Prediction market operators must now prepare for a potential third government-insider exclusion category alongside lawmakers and state workers. Any platform that lacks real-time clearance-verification systems risks being singled out when defense committees demand proof of military-user blocking.
Joins the Steil congressional trading ban and North Carolina's state-worker prohibition as the third government-insider trading restriction this month, showing lawmakers and governors are racing to close insider-trading loopholes faster than platforms can build compliance programs.