House Oversight Chair calls for possible ban on government officials’ prediction market bets over insider trading concerns

The Republican chair of the House Oversight Committee is calling for new limits on government officials' use of prediction markets, including the possibility of an outright ban, amid growing concerns that public officials could use insider information to profit from bets on the platforms.

On Friday, the committee released findings from an investigation it launched in May into insider trading risks in prediction markets among government officials, military personnel, and those with security clearances. The committee sifted through 1,700 pages of documents and also received five bipartisan staff briefings from prediction market companies, said Chair James Comer, R-Ky.

Concerns in Washington have intensified over the past year, particularly after an active-duty U.S. Army soldier who used confidential information to place bets on Polymarket ahead of former Venezuelan President Nicolás Maduro's capture. Thereafter, others in government have also been found using inside information to make money on bets on prediction markets, including the White House's former teleprompter operator. Political candidates have also faced allegations of insider trading on the platforms.

"Congress must consider additional reforms to prevent public corruption and restore the American people's trust in government," Comer said on Friday.

Those reforms should be legislation that restricts which bets federal employees, lawmakers and congressional staff can place on prediction markets — or an outright ban, the committee said.

"Whether it's an outright prohibition on trading on prediction markets or restrictions on some subset of contracts like government-related contracts, applying these restrictions to officials in all branches of government would strengthen ethical expectations that government personnel should not personally and financially benefit from access to non-public information associated with their work as government servants…" according to the memo.

Congress should also have a role in encouraging prediction market companies and federal agencies to share necessary information to enforce restrictions, the committee said.

Both major prediction market companies — Kalshi and Polymarket — have said they have taken steps to tighten controls to prevent government officials from using inside information. Lawmakers have also begun addressing the issue themselves. In April, the Senate voted to pass a resolution to ban members from trading on prediction markets.