US Senate bans members from participating in prediction markets
The upper chamber of the US Congress, the Senate, unanimously banned senators, Senate staff, and Senate officers from participating in prediction markets, where users can wager on the outcomes of real-world events. The ban took effect immediately and responded to growing concerns that public officials with access to non-public information could use these markets for personal gain.
In March 2026, SiGMA News reported that senators had introduced a bill titled the End Prediction Market Corruption Act. The text proposed banning the President, the Vice President, and members of Congress from participating in prediction markets in any form.
Senate announces internal ban
The Senate decision does not ban prediction markets as a business and does not change the rules for platforms such as Kalshi or Polymarket. It is an internal Senate rule. Sitting senators, Senate employees, and Senate officers are now prohibited from engaging in any activity on event contract markets. The initiative was introduced by Republican Senator Bernie Moreno, and Democratic Senator Alex Padilla secured an expansion of the ban to cover Senate staff.
“This Senate rule is a commonsense step to ensure that senators and their staff cannot use their positions of public trust to line their own pockets.”
Alex Padilla, US Senator from California
According to Reuters, senators also urged the House of Representatives, as well as the executive and judicial branches, to adopt similar restrictions.
The measure is already in force. Its political signal is strong: the Senate began by imposing self-restraint rather than waiting for a broader federal decision on how to handle prediction markets.
Why the measure became urgent
The central risk driving the ban is insider trading. Prediction market contracts can be tied to elections, military operations, regulatory decisions, international conflicts, and other events that officials may become aware of before the market does.
Associated Press reports that concern intensified after cases involving sensitive or classified information and after bets on geopolitical events, including potential scenarios involving Iran. Senate Democratic leader Chuck Schumer called the ban an obvious step and said Congress should not become a venue where officials can bet on wars or economic crises.
The Maduro case on Polymarket
One of the highest-profile cases was an investigation into bets placed by US service member Gannon Ken Van Dyke. He was accused of using non-public information about a military operation involving Nicolas Maduro to trade on Polymarket.
According to the US Department of Justice, Van Dyke participated in planning the operation and had access to classified information regarding its timing. Investigators say he placed about 13 bets on Polymarket, invested approximately $33,000, and generated more than $400,000 in profit.
The Commodity Futures Trading Commission also filed a civil lawsuit against Van Dyke, calling it the first insider trading case linked to event contracts. The case prompted US lawmakers to introduce a bill to ban prediction market contracts related to wars and killings.
Prediction markets are becoming more popular
According to Blask Analytics, over the past year, prediction markets in the US have become a visible category of online attention. Since May 2025, the Blask Index, which reflects market interest and attention volume, has increased more than fivefold.
The category is highly concentrated: Polymarket accounts for 72.47 per cent of BAP, representing a 72.47 per cent share of attention within the category; Kalshi accounts for 23.7 per cent of BAP. In practice, two brands dominate most of the category.
Kalshi also posted 138.8 per cent growth on the Blask Index, while Robinhood grew by 779.8 per cent. These figures do not prove that growth in prediction markets caused the ban, but they provide context. The decision was taken when the category had clearly stopped being niche.
The dispute between the CFTC and US states
The Senate ban also appeared amid a wider legal dispute over who should regulate prediction markets. The CFTC argues that it should regulate prediction markets because they fall under the Commodity Exchange Act. At the same time, New York, Massachusetts, and later Wisconsin have brought legal actions against platforms under state gambling laws, treating the activity as betting. This has prompted the CFTC to file additional cases to defend its jurisdiction over prediction markets.
For lawmakers, the question is not only whether prediction markets are gambling or financial contracts. It is also about who should be allowed to trade in markets where outcomes may depend on government decisions or non-public information.
Why the ban matters for the industry
The Senate ban does not change the legal status of prediction markets in the US, but it highlights the political environment around the sector. Earlier debates focused on CFTC jurisdiction, state laws, and similarities between event contracts and betting. Now the focus includes public trust, access to sensitive information, and the conduct acceptable to public servants.
The Senate started with self-restriction. It is not yet clear whether the House of Representatives, federal agencies, and the CFTC will follow. For now, the industry can only watch and wait.
This article was first published in Russian on 4 May 2026.
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