Democratic Rep. Seth Moulton implemented a new policy for his staff on Wednesday, banning employees from gambling on prediction markets, the new online trading platforms that have soared in popularity in recent months.
Moulton said in a post to X that the new trading platforms, Kalshi and Polymarket — which allow users to place bets on the outcomes of real events — are “creating a perverse incentive structure that poses a genuine threat to American society today.”
“Congressional staff and the Members they work for exist to serve the constituents of the districts they represent, not to profit off of the very policy decisions and world events that we are here to respond to,” the post continued. “My office has not, and will not, engage in these trades that run counter to every principle of a clean, honest government that works for the people.”
A spokesperson for Moulton’s office told NOTUS that, to their knowledge, Moulton is the first lawmaker to implement such a staff-wide policy.
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Lawmakers have raised concerns about prediction markets in recent weeks as Polymarket has seen several curiously timed trades related to the capture of Venezuelan President Nicolás Maduro and the United States’ war with Iran, among others.
CNN reported this week that one Polymarket user had made nearly $1 million since 2024 through accurate bets on military actions that the United States and Israel have taken against Iran.
Moulton is also one of 30 Democratic lawmakers who signed on to a bill Rep. Ritchie Torres introduced in January that would ban “elected officials, political appointees, Executive Branch employees, and congressional staff from buying, selling, or exchanging prediction market contracts tied to government policy, government action, or political outcomes” based on insider knowledge.
Kalshi and Polymarket both released statements this week saying they would clamp down on insider trading by lawmakers and sports players on their platforms. Polymarket said it updated its rules to ban trading on stolen confidential information and illegal tips, and banned users from “trading on any contract if they hold a position of authority or influence sufficient to affect the outcome of the underlying event.”
Democratic members of the Senate have also introduced legislation that seeks to address concerns about insider trading on prediction markets. Earlier this week, Democratic Sen. Adam Schiff joined Republican Rep. John Curtis in introducing the “Prediction Markets Are Gambling Act,” which would give states, rather than federal regulators, control over sports betting and would classify prediction markets alongside casinos.
“People who have particular insights, either because they’re government officials or because they’re the athletes themselves who end up influencing the events they are betting on … that’s heavily suggestive of insider trading,” Schiff told CNBC on Wednesday, “There’s no way to really regulate that. At least, it’s not being regulated today.”
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