U.S. Senate bans members from prediction market trading amid insider risk concerns

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Senate bans prediction trading

Highlights

U.S. Senate unanimously passed S. Res. 708, immediately banning senators from trading on prediction markets to address insider risk concerns.
Recent insider trading incidents, including a $400,000 Polymarket bet by a U.S. Army soldier, have triggered increased enforcement and platform-level compliance by Kalshi and Polymarket.
New York and Illinois issued executive orders blocking state employees from betting with nonpublic information, signaling expanded compliance pressures beyond Congress.

Rule change takes effect immediately

According to The Block, the Senate Press Gallery said the chamber unanimously passed S. Res. 708 on Thursday, amending the Senate’s standing rules to bar U.S. senators from trading on prediction markets with immediate effect.

The resolution was introduced last week by Sen. Bernie Moreno, a Republican from Ohio, as part of a broader push to prevent insider trading tied to political or government information. Moreno said the measure is designed to address a growing concern in Washington, where prediction markets have drawn attention over whether participants could profit from confidential knowledge.

Moreno said serving in Congress is "an honor, not a side hustle" and argued that the public should be confident lawmakers are acting for the right reasons rather than seeking personal gain through speculative trading tied to sensitive events.

Platforms and states face wider compliance pressure

Concern around insider activity has risen since January, when lawmakers flagged a Polymarket account that wagered Venezuelan President Nicolás Maduro would be out by the end of that month and reportedly netted $400,000. Prosecutors last week arrested active-duty U.S. Army soldier Gannon Ken Van Dyke, 38, alleging he used confidential information to place that bet; he has since pleaded not guilty.

Prediction market operators say they are strengthening controls. Kalshi has said it has taken steps to root out insider trading and has publicly disclosed several cases in recent months. Last week, the platform said it opened three insider cases involving candidates and fined and suspended them for betting on their own races. Polymarket has also introduced technological safeguards aimed at stopping insiders from trading and protecting market integrity.

State authorities are also responding. New York and Illinois have issued executive orders in recent days blocking state employees from using nonpublic information to place bets on prediction markets, extending the compliance debate beyond Congress and increasing pressure for broader restrictions across the sector.

Kalshi founder Tarek Mansour called the Senate resolution a great step and said the next move should be passage in the House.

Our earlier coverage of Polymarket’s compliance push explained how the prediction-market operator tightened monitoring to curb insider trading and manipulation as it pursued new funding and prepared for a potential U.S. relaunch. We noted Polymarket’s use of blockchain analytics and its broader effort—alongside rival platforms—to reassure regulators and investors as scrutiny of prediction markets intensifies.

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