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

Representative Ritchie Torres (D-NY) and 30 of his colleagues in the House of Representatives, including former House Speaker Nancy Pelosi (D-CA), are doing everything they can to deny government officials access to prediction markets.

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

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

The bill states that DC insiders should be barred from participating in markets if they have “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 discourage people with inside information about a company from trading in securities. Prediction markets and the companies that offer them, such as Kalshi and Polymarket, have until now been exclusively regulated by the Commodities and Futures Trading Commission.

Earlier this week, Polymarket came under 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 US special forces arrested Maduro.

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

Torres, Pelosi and their colleagues in the House of Representatives are not the only ones angry about what appear to be unfair predictions from insiders in DC.

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

The clip shows the last 30 seconds of a press conference at the White House, and a timer showing that the event ended just before it reached 1 hour and 5 minutes – which was a huge windfall for forecasters who were betting on the 65-minute press conference.

“Who cares how long a press conference lasts? What idiot would gamble on that?” he wrote on X. “But we should Certainly I think it’s important that there are markets that give people with power incentives to change outcomes, so that they or people they know can get rich with a big gamble. It’s crazy that we allow this to happen.”

Loxley Fernandes, the CEO and co-founder of Dastan, owner of the prediction protocol Myriad and also an editorially independent company Declutter– argued that insider participation is a feature rather than a bug.

“Academically, prediction markets are one of the most effective tools for rooting out insider information and maximizing the efficiency and speed of information transfer,” he said earlier this week.

Although he sees insider trading as a problem, he objects to the comparison between prediction markets and traditional gambling. “Until now we have seen modern prediction markets as alternative casinos – and I believe this formulation is incorrect,” he added.