rewrite this title US Congressman Moves to Ban Staff From Trading on Prediction Markets – Decrypt

A prediction market analyst says more congressional offices will likely follow Massachusetts Democrat Seth Moulton’s (D-MA) lead after he became one of the first members of Congress to ban his staff from trading on platforms like Polymarket and Kalshi.

Effective Wednesday, Rep. Moulton’s office-wide policy prohibits all staff, including district, legislative, communications, and operations personnel, from trading or holding positions on political, legislative, regulatory, or geopolitical outcomes, or on any information learned in an official capacity.

“Prediction markets have become a playground for corrupt insiders who are able to place bets on things like election outcomes, wars, and even the deaths of public figures,” Moulton said in a statement. “This is creating a perverse incentive structure that poses a genuine threat to American society today.”

The ban arrives amid a growing push by lawmakers on both sides of the aisle to crack down on insider trading in prediction markets, a concern that has arisen as anonymous traders have posted outsized gains on politically sensitive events, fueling suspicions that government insiders are cashing in on non-public information.



“I think everyone is very conscious of the potential for and optics around insider trading around government actions,” prediction market analyst Dustin Gouker told Decrypt, noting he expects “a lot of other Congressional offices will take similar actions, even if it’s done publicly.”

“I think it’s quite clear that insider trading on things going on in Washington isn’t kosher or welcome at CFTC-regulated prediction markets,” Gouker said. “Creating clear and meaningful penalties by law would make it abundantly clear,” though he acknowledged some may still attempt it.

Also on Wednesday, Reps. Adrian Smith (R-NE) and Nikki Budzinski (D-IL) introduced the PREDICT Act, or the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act.

The bipartisan bill seeks to prohibit members of Congress, their spouses and dependent children, the President and Vice President, political appointees, and other senior officials from trading on political events, policy decisions, or government actions on prediction markets. 

Violations would carry a civil penalty of 10% of the transaction’s value, plus full disgorgement of profits paid into the U.S. Treasury.

Lawmakers have moved quickly in recent days, with Senators Adam Schiff (D-CA) and John Curtis (R-UT) last week proposing a ban on sports-related contracts on CFTC-registered platforms, followed Tuesday by Sen. Chris Murphy (D-CT) and Rep. Greg Casar (D-TX) unveiling the BETS OFF Act targeting markets tied to terrorism, assassinations, and war.

The push follows scrutiny over controversial bets on U.S. strikes on Iran and highly profitable wagers tied to the capture of Venezuela’s Nicolás Maduro, raising concerns about potential insider trading.

With lawmakers ramping up scrutiny, Polymarket and Kalshi introduced stronger anti–insider trading measures, combining stricter policies with upgraded monitoring and surveillance capabilities.

Gouker, however, tempered expectations on how clean markets can ever get. 

“Getting to 100% is probably an impossible ideal,” he said, referring to eliminating insider trading entirely, but noted that “better rules, laws, and surveillance can likely make it much more difficult.”

Decrypt has reached out to Polymarket and Kalshi for comment.