US Senate Blocks Members from Betting on Event Markets

The US Senate has moved to tighten ethical standards by prohibiting its own members and staff from taking part in prediction markets, a growing sector where users wager on the outcomes of real-world events. The new rule takes effect right away and reflects mounting concern in Washington over potential misuse of privileged information.

Senate Acts Unanimously to Curb Insider Risks in Prediction Markets

Sen. Bernie Moreno led the initiative, arguing that elected officials should not engage in speculative activities while serving the public. Alex Padilla later expanded the measure through an amendment extending the restriction to Senate employees as well, as reported by the Associated Press.

Support for the change crossed party lines. Senate Democratic leader Chuck Schumer described the decision as an obvious and necessary safeguard, warning that allowing lawmakers to bet on sensitive matters such as military conflicts or elections could undermine public trust in government institutions. He also called on other branches of government to adopt similar restrictions.

The decision comes amid heightened scrutiny of platforms such as Polymarket and Kalshi, which allow users to trade contracts tied to geopolitical developments, economic indicators, and political outcomes. Critics have raised alarms about the possibility of insider trading when participants may have access to non-public information.

Military Case Sparks Calls for Tougher Market Rules

Recent incidents have strengthened those concerns. A US special forces soldier was charged with using classified intelligence to place bets related to the capture of Nicolás Maduro, generating substantial profits. In another case, election candidates were penalized by a platform for trading on their own campaigns.

Lawmakers Todd Young and Elissa Slotkin have gone further, proposing broader legislation that would ban all federal officials and employees from exploiting insider knowledge in prediction markets. They characterized the Senate’s latest move as an initial step to achieve more comprehensive regulation.

The White House has also issued internal guidance cautioning staff against using confidential information in such markets. At the same time, the industry continues its growth, with some political figures maintaining ties to these platforms. Donald Trump Jr., for example, serves as an adviser to major players in the space.

Despite regulatory concerns, companies operating prediction markets have welcomed the Senate’s action, suggesting it could strengthen credibility and trust in the sector. Still, the broader debate over how best to regulate these platforms, when they intersect with national security and governance, remains unresolved.