Bill Would Ban Federal Officials From Using Prediction Markets
A new bill from Rep. Ritchie Torres aims to bar federal elected officials and key government employees from trading on prediction market platforms such as Kalshi and Polymarket. The effort follows recent controversies over potential insider trading tied to these markets.
The proposed Public Integrity in Financial Prediction Markets Act targets the use of nonpublic information by government insiders and comes amid broader regulatory scrutiny of prediction markets as possible illegal gambling operations.
⏳ 3 mins read
📖 Published: January 10th, 2026
✍️ Updated: January 10th, 2026
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Bill Targets Federal Employees Using Prediction Markets
In the wake of recent prediction market-related controversies, Rep. Ritchie Torres, D-NY, has filed a bill that would ban federal employees from using prediction markets.
The Public Integrity in Financial Prediction Markets Act would prohibit federal elected officials, political appointees, and executive branch personnel from using prediction market platforms like Kalshi and Polymarket.
The bill proposes that government employees can’t make prediction market transactions if “at the time of the covered transaction, possesses material nonpublic information relevant to such covered transaction.”
The bill further adds that those covered by the bill can’t use the platforms if they “reasonably obtain such material non-public information in the course of performing official duties, including when such information would not otherwise be available to a member of the public exercising reasonable diligence.”
Growing Concerns Over Insider Trading
The bill from the New York legislator comes after allegations of insider trading on Polymarket regarding the capture and arrest of former Venezuelan leader Nicolás Maduro last weekend.
In December, a user also apparently won 22 of 23 bets on the platform for more than $1 million, all in a single day. All the wins involved Google search markets, and some on social media alleged the user was an insider with the company.
While Kalshi says it bars insider trading, Polymarket doesn’t have a policy addressing it. In fact, CEO Shayne Coplan recently spoke at an Axios Business event and said he believes using insider information for trading is good for the public.
“What’s cool about Polymarket is that it creates this financial incentive for people to go and divulge the information to the market,” Coplan said.
States Question Whether Prediction Markets Are Gambling
PMs have been the focus of criticism and legal actions from state gaming regulators in recent months. Some state gaming regulators view the platforms as illegal sports betting. However, the companies argue the Commodity Futures Trading Commission already regulates the platforms. Thus, they aren’t considered gambling operators.
Concerning the new bill, firms like Kalshi and Polymarket believe they shouldn’t be regulated by gambling-focused bodies because they fall more in line with financial markets.
In September, federal legislators sent a letter to the CFTC outlining their concerns over the platforms’ sports contracts. The legislators raised questions about whether the contracts were simply end-runs around state sports betting laws. They pointed to a lack of compliance with betting age requirements and other rules that legal sportsbooks must adhere to.
