The U.S. Senate moved fast Thursday. Unanimously. Senators and their staff now stand banned from trading on prediction markets like Kalshi and Polymarket. The rule change, passed by voice vote with no objections, took effect immediately. No roll call needed. Just done.
Republican Sen. Bernie Moreno of Ohio drove the resolution. He introduced it last week, amending Senate Rule XXXVII to bar members from any “agreement, contract, or transaction that provides for any purchase, sale, payment, or delivery that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of a specific event.” Sen. Moreno’s office released the text. An amendment from Democratic Sen. Alex Padilla of California extended it to staffers. “Serving in Congress is an honor, not a side hustle,” Moreno posted on X afterward. “Americans deserve to know that their leaders are here for the right reason!” The measure urges the House, executive branch, and judiciary to follow suit.
Why now? Fears of insider trading. Platforms have exploded in popularity, drawing bets on elections, wars, even military ops. Traders have pocketed hundreds of thousands by nailing U.S. actions before the public knew. Take Army Master Sgt. Gannon Ken Van Dyke. The special forces soldier allegedly used classified details from Operation Absolute Resolve—the January raid capturing Venezuela’s Nicolás Maduro—to bet on Polymarket. He turned $33,000 into over $400,000, prosecutors say. Indicted last week on charges including commodities fraud and theft of government info, Van Dyke pleaded not guilty Tuesday in Manhattan federal court. Bail: $250,000 with travel limits. The Justice Department unsealed the charges April 23.
Polymarket isn’t alone. New accounts there cashed in big on a U.S.-Iran ceasefire April 7, right as White House staff got nonpublic warnings. Kalshi, the CFTC-regulated rival, has suspended candidates for betting on their own races—like Minnesota state Sen. Matt Klein, fined for wagering on his congressional bid. Platforms already block Congress members. Kalshi CEO Tarek Mansour: “I applaud the Senate for passing this resolution to ban Senators and their offices from trading on prediction markets. Kalshi already proactively blocks members of congress and enforces against insider trading. This is a great step to increase trust in our markets by making it an industry standard. Now, let’s pass this in the House!” Polymarket echoed support: “We’re in full support… codifying this into law is a step forward for the industry.” CNBC reported the reactions.
Legislative Momentum Builds Amid Broader Scrutiny
This ban caps months of bills targeting prediction markets. Platforms trade “event contracts” on real-world outcomes—policy calls, sports, violence. CFTC oversees some, like KalshiEX, after court wins. But crypto-based Polymarket operates offshore, dodging full U.S. rules. Donald Trump Jr. advises both, fueling optics issues.
Bipartisan pushback surged. Sens. Kirsten Gillibrand (D-N.Y.) and Dave McCormick (R-Pa.) dropped their bill Thursday—hours after the ban. It bars Congress, the president, VP, and senior execs from trading. Directs CFTC to tighten insider rules and nix bets on wars, terror, anything “contrary to the public interest.” Age verification: 18 minimum. “Elected officials should be working for the people they represent—not lining their own pockets with insider information,” Gillibrand said. Politico detailed the rollout.
Sens. Elissa Slotkin (D-Mich.) and Todd Young (R-Ind.) lead the Public Integrity in Financial Prediction Markets Act, from March. Covers feds using nonpublic info on gov-related contracts. “A good first step,” Young called the Senate resolution. Their partners: Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah). Others target sports bets or elections. The Prediction Markets Are Gambling Act would block CFTC entities from casino-style or athletic contracts. AP News covered the wave.
Platforms fight back on some fronts. Kalshi touts hedges against real risks—like inflation or Fed moves. Volumes hit billions in 2025 elections. But death pools, war wagers? Critics say they incentivize harm. CFTC probes loom; Dems want bans on elections, military bets. White House ended two Polymarket investigations, but soldiers’ cases show enforcement bite.
House lags. Stock trading bans for lawmakers stall there too. Prediction markets test similar fault lines: info edges, public trust, fed-state turf. Senate’s quick strike—covering all event trades, not just insider ones—sets a precedent. Platforms adapt. Kalshi blocks pols proactively. But as bets swell on Iran, elections, policy, pressure mounts. Will House follow? CFTC act? Platforms like Truth Social’s new Truth Predict enter the fray.
One thing clear. Senators drew a line. No more Capitol bets. For now.
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