Should politicians be able to use prediction markets? House bill proposes ban

Rep. Ritchie Torres (D-NY) and 30 of his House colleagues, including former House Speaker Nancy Pelosi (D-CA), are pushing to ban government officials from accessing prediction markets.

Lawmakers on Friday morning introduced new legislation, the Public Integrity in Financial Prediction Markets Act of 2026.

The bill would prevent lawmakers and their staff from participating in prediction markets. In the context of the bill, that would include all elected federal officials, political appointees, and employees of the House of Representatives, the Senate, and other executive agencies.

The bill argues that DC insiders should be barred from participating in markets when they possess “material non-public information” about a market or the ability to influence its outcome.

The term is borrowed from securities law and is used to prevent people with inside information about a company from trading securities. Prediction markets and the companies that offer them, such as Kalshi and Polymarket, have until now been regulated exclusively by the Futures and Commodities Trading Commission.

Earlier this week, Polymarket faced scrutiny after a trader won more than $400,000 on a bet that Venezuelan President Nicolás Maduro would be removed from office before the end of the month. Criticism focused on the timing of the bet, which appeared just hours before U.S. special forces detained Maduro.

“The most corrupt corner of Washington, DC may well be the intersection of prediction markets and the federal government, where insider trading and peer-to-peer trading are no longer imagined risks but demonstrated dangers,” Rep. Torres said in a statement. “We ignore this corruption in plain sight at our own peril.”

Torres, Pelosi and their House colleagues aren’t the only ones complaining about what appear to be unfair predictions made by insiders in DC.

Sen. Chris Murphy (D-CT) included a clip from a recent White House press conference in his own criticism of allowing elected officials access to bets in markets they can directly influence.

The clip shows the last 30 seconds of a White House press conference and a timer showing that the event concluded just before it was set to last 1 hour and 5 minutes, creating a huge windfall for predictors who bet against the 65-minute press conference.

“Who cares about the length of a press conference? What idiot bets on that?” wrote in X. “But we should definitely They care that there are markets that give incentives to people with the power to change outcomes, so that they or people they know can get rich from a big bet. “It’s crazy that we allow this.”

Loxley Fernandes, CEO and co-founder of Dastan, owner of the Myriad prediction protocol and also editorially independent. Decipher— argued that insider involvement is more of a feature than a bug.

“From an academic point of view, prediction markets are one of the most effective tools for uncovering inside information and maximizing the efficiency and speed of information transmission,” he said earlier this week.

While he sees insider trading as a problem, he disagrees with the comparison between prediction markets and traditional gambling. “To date, we have considered modern prediction markets as alternative casinos, and I believe this formulation is incorrect,” he added.