US congressman moves to bar politicians from prediction markets

A US congressman has introduced legislation that would prevent federal officials from trading political and policy-related prediction market contracts.

Democratic Representative Ritchie Torres of New York unveiled the proposal on Monday, aiming to curb potential conflicts of interest.

The bill, titled the Public Integrity in Financial Prediction Markets Act, would ban trading based on government actions, policy decisions, or political outcomes.

It would apply to elected officials, political appointees, and federal employees who could access sensitive information through their roles.

The proposal follows allegations of insider trading on prediction market platform Polymarket.

Scrutiny intensified after a Polymarket user wagered $30,000 on Venezuelan leader Nicolás Maduro being removed from power and later reportedly earned $400,000.

Prediction markets gained popularity during the 2024 US presidential campaign as users bet on the election outcome.

Platforms such as Polymarket and Kalshi drew heavy activity around contests involving Donald Trump and Kamala Harris.

Critics argue that officials with advance knowledge of policy or enforcement actions could exploit these markets.

The bill would treat such activity similarly to insider trading in traditional financial markets.

If enacted, the ban would cover Congress members, White House staff, cabinet officials, regulators, and career civil servants.

The legislation does not yet outline penalties or identify which agency would oversee enforcement.