A high-profile wager tied to the political fate of Venezuelan leader Nicolás Maduro is intensifying scrutiny around prediction markets and whether government insiders can legally profit from sensitive political outcomes.

The episode has prompted a U.S. lawmaker to introduce legislation aimed at restricting federal officials from trading on event-based markets when they possess, or could reasonably obtain, nonpublic information through their official roles.

Maduro Bet Triggers Capitol Hill Response

Representative Ritchie Torres is preparing to introduce the Public Integrity in Financial Prediction Markets Act of 2026, according to Business Insider.

The bill follows reports that a trader earned a substantial payout after betting on Maduro’s removal from office shortly before his arrest by U.S. forces in Caracas.

Publicly available data shows that a newly created account on Polymarket placed a $30,000 wager predicting that Maduro would be out of power by January 31, 2026.

Within a day of his capture and transfer to the United States, the position paid out more than $400,000.

The timing of the trade has raised questions about whether individuals with access to sensitive political or intelligence information could exploit prediction markets in ways that would be illegal in traditional financial markets.

What The Proposed Law Would Change

Torres’ legislation would prohibit federal elected officials, political appointees, and executive-branch employees from engaging in prediction market trades tied to political outcomes, government actions, or public policy decisions if they possess material nonpublic information or could reasonably acquire it through their official duties.

The bill defines material nonpublic information as data a reasonable investor would consider important in making a financial decision and that is not publicly available.

Prediction market contracts are broadly described as financial instruments or derivatives linked to the occurrence or non-occurrence of future events and offered by platforms operating in interstate commerce.

Supporters of the proposal argue that the absence of clear rules risks eroding public trust by allowing officials to profit from outcomes they may help influence or foresee.

The legislation aims to establish guardrails similar to those governing insider trading in equities and other regulated financial products.

Also Read: Crypto Fear Index Hits Neutral For First Time Since October: Is The Bottom In?

Prediction Markets Split On Insider Trading

The controversy highlights a growing divide among prediction market platforms.

Polymarket currently does not restrict trading based on access to nonpublic information.

Its chief executive, Shayne Coplan, has previously argued that insider participation can improve market efficiency by pushing accurate information into prices, framing it as a potential public benefit rather than a flaw.

By contrast, Kalshi, a U.S.-regulated competitor, bars government decision-makers from trading on events they can influence.

Under Kalshi’s rules, a government official would have been prohibited from participating in a contract tied to Maduro’s political status.

The differing approaches highlight how prediction markets operate in a regulatory gray area, even as they attract growing interest from traders, policymakers, and institutional observers.

Why Venezuela Heightens The Stakes

The Maduro wager has drawn particular attention because of Venezuela’s expanding geopolitical relevance.

As previously reported, the country’s vast oil and natural gas reserves have placed it at the center of shifting global energy and sanctions dynamics involving the United States, China, and Russia.

That strategic backdrop makes political outcomes tied to Venezuela especially sensitive, increasing concerns that advance knowledge of diplomatic or enforcement actions could be monetized through event-based markets.

The episode also echoes earlier controversies in Washington, including scrutiny of well-timed stock trades made by lawmakers and administration officials around major policy announcements during the Trump administration.

Read Next: They Can't Hack Your Wallet Anymore, So They're Coming To Your House Instead