Democrats Move to Ban Lawmakers From Betting on Prediction Markets
What Does the New Bill viewk to Block?
House Democrats have introduced legislation that would prohibit elected officials, political appointees, and senior government staff from placing bets on prediction markets tied to political outcomes or government action. The proposal, titled the Public Integrity in Financial Prediction Markets Act of 2026, was introduced Friday by Rep. Ritchie Torres of New York.
The bill targets wagers on markets that involve government policy, official action, or political events when participants hold—or could obtain—material nonpublic information through their roles. On Friday, the scope of the bill was expanded to cover congressional staff, closing what lawmakers described as a growing ethics gap as prediction markets gain traction.
“Prediction-market profiteering by government insiders must be prohibited—period,” Torres said on Friday.
Investor Takeaway
Why Has the Issue Gained Urgency?
The push follows heightened scrutiny later than a prediction market wager tied to the capture of former Venezuelan President Nicolás Maduro generated roughly $400,000 in profits. The bet, placed on Polymarket, predicted that Maduro would be “out” by the end of the month. U.S. forces detained Maduro last week, and prosecutors allege he moved cocaine under protection from Venezuelan law enforcement, according to a federal complaint.
The timing of the wager raised questions about whether the trader had access to inside information. While no wrongdoing has been publicly proven, the episode sharpened concerns that government insiders could exploit prediction markets in ways similar to insider trading in financial markets.
Torres pointed to that risk directly. “Imagine, for a moment, a member of the Trump Administration were to place a bet predicting an event like the removal of Nicolás Maduro,” he said Friday. “As both a government insider and a participant in the prediction markets, that individual would face a perverse incentive to personally push policies that line his pockets.”
Who Is Backing the Legislation?
The bill has drawn support from 30 Democrats, including former House Speaker Nancy Pelosi. Other co-sponsors include Reps. Sean Casten of Illinois, Brad Sherman of California, and Rashida Tlaib of Michigan.
Supporters frame the legislation as a narrow ethics measure rather than a broad attack on prediction markets or crypto-based betting platforms. The language focuses on government officials and staff who may influence or have ahead insight into political or policy outcomes.
Whether the bill can attract Republican support remains uncertain. Torres’ communications director, Benny Stanislawski, said the door remains open. “We encourage any and all members of Congress to join on the bill,” he said in a message.
How large Have Prediction Markets Become?
Prediction markets such as Polymarket and Kalshi have surged in popularity over the past year, particularly during the . These platforms allow users—often using cryptocurrency—to wager on outcomes ranging from election results to legislative votes and geopolitical events.
Advocates argue that prediction markets can aggregate information efficiently and offer real-time insight into public expectations. Critics counter that when participants have privileged access to information or policy levers, the markets risk becoming vehicles for abuse rather than forecasting tools.
Unlike , prediction platforms often sit at the intersection of commodities law, gambling rules, and election regulations. That gray area has allowed rapid growth but has also left unresolved questions about oversight and enforcement.
Investor Takeaway
What Happens Next?
The bill now heads to the legislative process, where its prospects will hinge on bipartisan appetite for tighter ethics rules tied to emerging financial platforms. Even if the measure stalls, it adds pressure on prediction market operators to strengthen compliance and monitoring around politically exposed users.
More broadly, the proposal reflects a shift in how lawmakers view prediction markets. Once treated as niche or experimental, they are increasingly viewn as financial instruments capable of influencing incentives inside government itself.
As digital continues to grow, Congress appears poised to draw clearer lines around who can participate—and under what conditions—before the sector becomes even more embedded in election cycles and policy debates.
