Senators voted unanimously on Thursday to ban themselves from trading on prediction market platforms amid growing concerns of insider trading by elected officials on the popular events-based platforms.
The resolution immediately changed Senate rules blocking senators from entering into “an agreement, contract, or transaction” based on the “occurrence, nonoccurrence” or extent of occurrence of a specific future event.
The effort in the upper chamber to prevent lawmakers from leveraging their access to classified or nonpublic information in order to net lucrative profits on the platforms, which function by allowing bettors to buy and sell shares that represent the probability of a future event, comes as part of a broader reckoning in Congress over the need to regulate the popular sites.
The Trump administration’s foreign policy decisions in recent months have thrust the pitfalls of prediction market platforrms and their ability to encourage insider trading into the spotlight. Lawmakers in both chambers have sent letters to regulators and introduced a cascade of bills outlining concern around event contracts tied to topics such as war, violence and death.
Weeks before President Donald Trump launched the Iran war, bettors wagered on various markets related to the ouster of Iran’s former Supreme Leader Ali Khamenei. But when Khamenei was killed in the joint U.S.-Israeli airstrikes on Iran on Feb. 28, controversy ensued over whether the winning bets should be paid out. The prediction market platform Kalshi invoked a “death carveout” clause, arguing the contract prohibited betting on death, while users alleged fraud and mounted a lawsuit against the company seeking class action status.
That incident, and others like it, lends credibility to a letter Sen. Adam Schiff, D-Calif., and other Senate Democrats wrote to the Commodity Futures Trading Commission, the agency tasked with regulating prediction markets, expressing concern about prediction contracts that capitalize on death.
Following months of speculation over a well-timed bet on the January capture of former Venezuelan President Nicolás Maduro, federal prosecutors charged Master Sgt. Gannon Ken Van Dyke, a U.S. special forces soldier, with using classified intelligence to win more than $400,000 on Polymarket, a popular prediction market platform. Van Dyke has pleaded not guilty to the charges.
Kalshi suspended and fined three political candidates on April 22 after an internal investigation found they placed bets on the outcomes of their own elections.
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Sen. Bernie Moreno, R-Ohio, who introduced the Senate rules change proposal, celebrated its passing in a post on X, writing, “Serving in Congress is an honor, not a side hustle. Americans deserve to know that their leaders are here for the right reason!”
Speaking to reporters following the vote, Senate Minority Leader Chuck Schumer, D-N.Y., applauded the effort and urged House Speaker Mike Johnson, R-La., to follow suit.
“We’re in full support of this,” Polymarket said in a statement following the Senate ban. “Our Rulebook & Terms of Service already prohibit such conduct, but codifying this into law is a step forward for the industry. Happy to help move this forward however we can.”
Kalshi CEO Tarek Mansour thanked the Senate for passing the measure, calling it “a great step to increase trust in our markets by making it an industry standard.”
“Now, let’s pass this in the House!” Mansour added.
Sydney Carruth is a breaking news reporter covering national politics and policy for MS NOW. You can send her tips from a non-work device on Signal at SydneyCarruth.46 or follow her work on X and Bluesky.