Congress considers banning officials from betting on prediction markets

The House Oversight Committee, led by Chairman James Comer, is investigating whether government officials, military personnel, and people with security clearances are using insider information to profit on prediction markets. These platforms, like Polymarket and Kalshi, let users bet on real-world events, from elections to policy outcomes. The committee gathered nearly 1,700 pages of documents and held briefings with the platforms to understand how they detect suspicious trading.

The concern is that officials with access to non-public government information could use it to place winning bets, which would be a form of public corruption. Existing laws like the STOCK Act already prohibit such insider trading, but the committee is now considering whether to impose stricter, specific bans. Their memo suggests options ranging from a complete prohibition on trading for federal personnel to narrower limits on certain types of contracts. This move aims to close potential loopholes and reinforce public trust that government employees aren't monetizing their privileged access.