A US congressman has banned all of his employees from trading in the prediction markets, making him one of the first members of Congress to legislate such a ban.
Representative Seth Moulton (D-MA) issued an office-wide policy effective March 26, 2026, covering all staff across legislative, communications, regional, and operational teams.
The move comes as Washington wakes up to a crisis it helped create. Anonymous traders have been posting suspiciously large profits on politically sensitive events – election results, regulatory decisions, national flashpoints – and the finger is pointing directly at government insiders who have access to non-public information. The pressure on Congress to act is growing rapidly.
Lawyer Seth Moulton prohibits workers from using speculative markets like Kalshi, Polymarket
– CNBC (@CNBC) March 25, 2026
The Mechanism: How Congressional Insider Trading on Prediction Markets Works
Here’s how exploitation works. Prediction markets allow you to buy contracts with 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 when the news breaks.
Attorney Seth Moulton called it straight. Prediction markets have become a playground for crooks who place bets on election outcomes, wars, and the death of public figures. That framework is driving a whole wave of legislation.
Prediction markets are one of the most exciting innovations in the financial markets. However for a very long time, the @CFTC failed to provide guidance for these markets 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 will 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 and the full US dollar of profits. Treasurer.
Rep. Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act and called it not a ceiling but a floor. Chiefs Chris Murphy and Jeff Merkley have their own suggestions. The most extreme, the BETS OFF Act, would ban close government commerce entirely, including war, terrorism, and the Super Bowl halftime show.
None of these bills are close to being passed. The pro-industry stance of the Trump administration has significantly dampened momentum. But the political costs of inaction on visible corruption are mounting.
Prediction market analyst Dustin Gouker expects more congressional offices to follow Moulton’s lead quietly if not publicly. The rule window is open. It won’t stay that way forever.
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