U.S. Senate Bans Prediction Market Trading for Members and Staff

The United States Senate unanimously passed a rule prohibiting its members, staff, and chamber officials from participating in prediction markets. Sponsored by Senator Bernie Moreno, the legislation went into effect immediately as an amendment to Senate ethics guidelines to prevent public officials from using non-public information to profit from bets on elections, economic crises, and military actions.

The ban follows reports of high-value trades based on insider information. At least 16 accounts reportedly earned over $100,000 by predicting a February strike against Iran shortly before the death of Supreme Leader Ayatollah Ali Khamenei. Additionally, a U.S. Army Special Forces soldier faces charges for allegedly using classified data to earn over $400,000 predicting the demise of Venezuelan President Nicolás Maduro.

While the rule is an ethics mandate rather than a criminal law, violations involving fraud or existing insider trading laws can be referred for criminal prosecution. Prediction platforms Kalshi and Polymarket responded to the scrutiny by implementing new restrictions, including blocking political candidates from trading on their own campaigns. Senate Minority Leader Chuck Schumer and Senator Todd Young have called on the House of Representatives to adopt similar prohibitions to ensure government officials do not treat public office as a source of revenue.