US Congressman Moves to Ban Staff Trading on Prediction Markets

A sitting US congressman has banned his entire staff from trading on prediction markets, making him one of the first members of Congress to formalize such a prohibition.

Representative Seth Moulton (D-MA) issued the office-wide policy effective March 26, 2026, covering all personnel across legislative, communications, district, and operations teams.

The move arrives as Washington is waking up to a problem it helped create. Anonymous traders have been posting suspiciously large gains on politically sensitive events — election outcomes, regulatory decisions, geopolitical flashpoints — and the finger is pointing squarely at government insiders with access to nonpublic information. The pressure on Congress to act is building fast.

Rep. Seth Moulton bans staff from using prediction markets like Kalshi, Polymarket https://t.co/HqtpZKkaFc

— CNBC (@CNBC) March 25, 2026

The Mechanism: How Congressional Insider Trading on Prediction Markets Works

Here is how the exploit works. Prediction markets let you buy contracts tied to real-world outcomes. Will this bill pass? Will interest rates rise? A congressional staffer who knows a bill is about to die in committee, before the public does, can buy contracts betting on its failure and cash out the moment the news breaks.

Rep. Seth Moulton called it directly. Prediction markets have become a playground for corrupt insiders placing bets on election outcomes, wars, and the deaths of public figures. That framing is driving an entire wave of legislation.

Prediction markets are one of the most exciting innovations in financial markets. Yet for too long, the @CFTC has failed to provide guidance for these markets being used by millions of Americans. This ends today.

Read what steps the agency is taking here⬇️…

— Mike Selig (@ChairmanSelig) March 12, 2026

At least 6 bills targeting prediction markets were circulating in Washington as of late March 2026. The bipartisan PREDICT Act was introduced by Reps. Nikki Budzinski and Adrian Smith would ban members of Congress, senior staff, the president, vice president, and their families from trading on political or policy outcomes, with fines equal to 10% of the transaction value plus full forfeiture of profits to the US Treasury.

Rep. Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act and called it not a ceiling but a floor. Senators Chris Murphy and Jeff Merkley have their own proposals. The strictest, the BETS OFF Act, would ban government-adjacent trades entirely, including on war, terrorism, and the Super Bowl halftime show.

None of these bills is close to passing. The Trump administration’s pro-industry posture has significantly slowed momentum. But the political cost of inaction on visible corruption is rising.

Prediction market analyst Dustin Gouker expects more congressional offices to follow Moulton’s lead quietly if not publicly. The legislative window is open. It will not stay that way forever.

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