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The US Senate unanimously voted to ban senators, staff and officers from trading on prediction markets, moving to close an ethics gap as event-based betting platforms draw fresh scrutiny over insider-trading risks.
The US Senate unanimously banned senators, staff and officers from trading on prediction markets, moving to close an ethics gap as event-based betting platforms draw fresh scrutiny over insider-trading risks.
The chamber approved S. Res. 708 by unanimous consent on 30 Apr, with an amendment from Sen. Alex Padilla (D-CA) expanding the restriction beyond senators to include Senate staff and officers. The measure was introduced by Republican Sen. Bernie Moreno (R-Ohio) on 25 Apr.
Rule change
The resolution amends the Standing Rules of the Senate, adding language that bars senators from entering into any "agreement, contract, or transaction" the payout of which depends on the "occurrence, nonoccurrence or extent of a specific event."
That language targets prediction markets, where users trade contracts tied to real-world outcomes such as elections, legislation, geopolitical events or economic data.
Fast-growing market
Prediction markets have rapidly expanded to a multibillion-dollar trading venue since 2024. Trading volume across prediction markets exceeded $20bn in January, according to TRM Labs.
Main players in the space include Kalshi and Polymarket, with a growing number of exchanges and trading firms moving into the sector as demand for event-based markets accelerates.
Ethics concerns
The Senate vote follows a string of cases that raised concerns about whether people with privileged information were profiting from event markets.
A US special forces soldier was charged this month with using classified information about a planned operation involving Venezuelan President Nicolás Maduro to make more than $400,000 on Polymarket. Kalshi also suspended three congressional candidates for betting on their own races, TheWall Street Journal reported.
The Senate measure puts prediction markets into the broader debate over congressional trading and conflicts of interest, as lawmakers face pressure to restrict financial activity that could benefit from non-public information.
Kalshi CEO Tarek Mansour said the firm already restricts members of Congress from trading on its platform and applies controls aimed at limiting insider activity. Writing on X after the Senate vote, Mansour said the measure could help align industry practices more broadly.