The Senate on Thursday unanimously voted to pass Sen. Bernie Moreno’s (R-OH) bill banning senators, their staffs, and chamber officials from using prediction markets.
Congress’s upper chamber passed the prohibition after some users won hundreds of thousands of dollars by successfully anticipating American military action, which raises questions about insider trading on prediction market platforms such as Kalshi and Polymarket. Reports suggest that at least 16 accounts made more than $100,000 after correctly predicting a February strike against Iran, hours before the surprise American and Israeli attack on top Iranian officials that killed Iranian Supreme Leader Ayatollah Ali Khamenei.
Sen. Elissa Slotkin (D-MI), a former CIA analyst, said that potential insider trading amounts to an “operational risk.”
Moreno, who sponsored the legislation that passed on Thursday, said, “United States Senators have no business engaging in speculative activities like prediction markets while collecting a taxpayer-funded paycheck, period.”
“Serving in Congress is an honor, not a side hustle. Americans deserve to know that their leaders are here for the right reason.”
A U.S. Army Special Forces soldier who was part of the operation to capture Venezuelan President Nicolás Maduro had been accused of using classified information to make more than $400,000 on Polymarket by predicting the leader’s demise. He has pleaded not guilty to charges of disclosure of classified information. The soldier could face up to ten years in prison for each count.
“We must never allow Congress to turn into a casino where members representing the public can gamble on wars or economic crises or elections,” Senate Minority Leader Chuck Schumer (D-NY) said.
Kalshi last week sanctioned three political candidates for attempting to make trades on their bids for Congress. Kalshi and Polymarket said they back the Senate measure.
Tarek Mansour, Kalshi’s top executive, said that the prediction market company “proactively blocks members of Congress” from prediction markets. Kalshi spokeswoman Elisabeth Diana said Kalshi stops such behavior by running a “politically exposed persons’ list” to filter out those likely to have insider information on its platforms.
“If they hit that list, they can’t trade,” Diana said.
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