Draco wasn't lying about The Bet. It was utter blasphemy that Potter's name came out of the Goblet, and he had made sure that his father heard about it at once. Lucius had proposed The Bet. Draco had gotten half the school in on it: the Slytherins, most Ravenclaws, a couple of sceptical Hufflepuffs, and, surprisingly, the Weasley twins, though they, of course, believed that Potter would win the whole darned thing. He snickered. Idiots.
Nobody outside of The Bet knew of it, as a matter of principle, and Slytherin dignity.
The badges had been Pansy's idea.