Senate bars insider trading on prediction markets, with possible House action next

WASHINGTON — Bipartisan groups of House members are pushing for their chamber to adopt a bill banning members and staff from trading on the fast-growing prediction markets, after Senate passage of a similar bill last week.

"The Senate has read the room. Now I urge the Speaker to do the same," Rep. Nikki Budzinski (D-Ill.) said of her bipartisan version of such a measure which carries 15 co-sponsors including eight Republicans. 

Rep. Ashley Hinson (R-Iowa) is sponsoring a separate bill and posted on X after the Senate vote on Thursday, "I am leading this effort in the House. Let’s get it done." Rep. Ritchie Torres (D-Bronx) also has introduced a measure to curb government insider trading on the prediction platforms.

Senate Minority Leader Chuck Schumer (D-N.Y.) on Sunday described the need for the House to act as a national security concern. He also wants President Donald Trump to sign a comprehensive federal ban covering every government official, staffer and employee across the executive branch.

The betting platforms under scrutiny — such as Kalshi and Polymarket — have evolved from catering largely to sporting outcomes and such things as Oscar winners, to markets where users engage in billions of dollars of wagering each week on real-world events ranging from public policy, elections, the economy and national security concerns.

But with the rise in popularity of such trading, concerns are also rising about the ability of government officials profiting off events they might know about ahead of time or even have a hand in shaping.

"When people on the inside can profit from what they know before the public knows it, we have a serious problem. It puts our troops at risk. It puts our intelligence at risk. It puts our democracy at risk," Schumer said.

The Senate passage of its bill automatically put a ban into effect on the lawmakers in that chamber.

Schumer noted in a statement that at least 16 accounts made more than $100,000 each by correctly predicting a U.S. military strike on Iran, hours before the attack became public. Also, a U.S. Army Special Forces soldier was charged with using classified information to make more than $400,000 on bets tied to the U.S. operation to capture former Venezuelan leader Nicolás Maduro.

Polymarket and Kalshi leaders say they support the moves.

Tarek Mansour, Kalshi’s co-founder and CEO, posted on X that his platform proactively blocks members of Congress and enforces against insider trading proactively, adding. "This is a great step to increase trust in our markets by making it an industry standard."