- Restrictions for military members and Pentagon civilians from trading on prediction markets made the US defense policy bill.
- Insider trading in the military has been under fire since a soldier allegedly used classified information to trade on the capture of Venezuelan president Nicolas Maduro.
- Insider trading is already illegal for military members for classified information, but this bill seeks to include unclassified information filed under “non-public information.”
WASHINGTON – Restrictions on military members trading on prediction markets have made it on the U.S. draft defense bill. The draft bill, HR 8800, was released by the House Armed Services Committee last week and includes regulation for trading on prediction markets by members of the armed forces and employees of the Department of the Defense.
Section 521 of the bill is titled “Prohibition On Use of Prediction Markets By Personnel of the Department of Defense” and does just that, requiring the Secretary of Defense to implement regulations that prohibit military members from trading on national security topics. More specifically, the bill states that the Secretary of Defense “shall issue regulations prohibiting members of the covered Armed Forces and civilian members of the Department of Defense from entering into transactions on prediction markets in cases…”
These specific cases include times where members have nonpublic information relevant to transactions and when members obtain nonpublic information through official duties. Enforcement isn’t clearly stated, but the bill does state that violations of these regulations issue a “range of punishments.”
Insider Trading Ban Stems From Previous Military Case
The proposal to ban military members from trading on prediction markets comes shortly after a US special forces soldier allegedly used classified information to bet on the capture of Nicolas Maduro. The soldier was indicted but won more than $400,000 on markets for Maduro to be out of power and that U.S. forces would enter Venezuela.
North Carolina recently passed a bill preventing insider trading on prediction markets by government officials, which has also been an issue across many states. After many years of conflict regarding insider trading within legal sports betting, government officials seek to halt insider trading on prediction market platforms.
