US Senate bans senators and staff from prediction markets
The US Senate unanimously passed S. Res. 708, banning senators and their staff from using prediction markets to bet on political outcomes, policy decisions and other events tied to lawmakers’ official roles. The rule took effect immediately.
Republican Sen. Bernie Moreno introduced the resolution, arguing that elected officials should not profit from speculative prediction markets while receiving taxpayer-funded pay. Senate Minority Leader Chuck Schumer urged the House and the Trump administration to adopt similar restrictions.
Industry response was supportive. Kalshi founder Tarek Mansour called it a “great step” and urged action in the House. Polymarket said codifying the ban into law is positive, noting its own rulebook already prohibits such conduct and that it enforces against insider trading.
The Senate move follows recent insider-trading allegations involving prediction markets, including a Polymarket case where a soldier reportedly used confidential/classified intelligence to place winning bets, and state-level executive actions (California, New York, Illinois) targeting public employees’ use of non-public information for prediction markets.
Separately, the article includes a disclaimer that Decrypt’s parent company operates a prediction market platform (Myriad), highlighting potential conflicts of interest while the ban expands regulatory clarity around prediction markets.
Neutral
This is primarily a governance and ethics regulation for prediction markets, not a direct crypto-asset rule. By banning senators and staff from prediction markets, the Senate aims to reduce insider-trading and confidentiality advantages, which can improve market integrity. Platforms’ public support (Kalshi, Polymarket) suggests limited immediate operational disruption.
However, the move can still be short-term market-negative for prediction-market operators if compliance costs rise or if volumes tied to political outcome betting cool down. It also increases regulatory scrutiny after past insider-trading episodes—exactly the kind of catalyst that can temporarily widen spreads and reduce risk appetite among traders.
Longer-term, clearer rules may be bullish for sustainability: better compliance expectations can attract mainstream users and potentially deepen liquidity, similar to how broader “insider trading” enforcement tends to strengthen legitimacy over time. Net: neutral, with potential short-term volatility around affected prediction-market tokens/related equities, but improving credibility over the medium term.