The existence of banks gives a huge financial incentive to rob them. That doesn't mean we should get rid of banks. It means we should create a huge disincentive to rob them (which we do). Same thing needs to happen to people using national intelligence secrets in prediction markets.

That requires active participation in regulation and enforcement.

If anything, this administration is moving the other direction when it comes to betting markets, crypto, investments, etc.

What you are saying is logical for how enforcement should happen, but it isn’t happening that way.