A prediction market analyst says more congressional offices are likely to follow the example set by Rep. Seth Moulton, a Massachusetts Democrat who has become one of the first members of Congress to prohibit his staff from participating in prediction market platforms. The policy, which took effect Wednesday, applies to all personnel in his office, including district, legislative, communications, and operations staff. It bars them from trading or holding positions tied to political, legislative, regulatory, or geopolitical outcomes, or based on any information obtained through their official roles.
In a statement announcing the ban, Moulton described prediction markets as a venue exploited by corrupt insiders placing bets on election outcomes, wars, and even the deaths of public figures. He argued this dynamic creates a damaging incentive structure that poses a genuine threat to American society. The move comes as lawmakers from both parties have grown increasingly concerned about the potential for government insiders to profit from non-public information on such platforms.
Analyst Dustin Gouker told Decrypt that awareness of the insider trading risk is widespread among those in and around government. He said he expects many other congressional offices to adopt similar policies, whether or not they do so publicly. Gouker also noted that insider trading on Washington-related events is clearly unwelcome at CFTC-regulated prediction markets, and that establishing firm legal penalties would send an unambiguous message, though he acknowledged some individuals may still attempt it.
Also on Wednesday, Reps. Adrian Smith of Nebraska and Nikki Budzinski of Illinois introduced the PREDICT Act, formally known as the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act. The bipartisan legislation would 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 through prediction markets. Violations would result in a civil penalty equal to 10% of the transaction’s value, along with full disgorgement of any profits paid into the U.S. Treasury.
Legislative activity on this front has accelerated in recent days. Senators Adam Schiff of California and John Curtis of Utah proposed a ban on sports-related contracts on CFTC-registered platforms last week. On Tuesday, Sen. Chris Murphy of Connecticut and Rep. Greg Casar of Texas unveiled the BETS OFF Act, which targets markets linked to terrorism, assassinations, and war. The flurry of proposals reflects mounting concern over specific high-profile trades, including bets placed ahead of U.S. strikes on Iran and profitable wagers connected to the capture of Venezuelan President Nicolás Maduro.
In response to the growing scrutiny, prediction market platforms Polymarket and Kalshi have each introduced stronger anti-insider trading measures, combining tighter policies with enhanced monitoring and surveillance capabilities. Gouker, however, cautioned against expecting a perfect outcome, saying that eliminating insider trading entirely is probably an impossible ideal. He added that better rules, laws, and surveillance can make such activity significantly more difficult, even if it cannot be eradicated completely.
Originally reported by Decrypt.
