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More than half the people who actually draft legislation on Capitol Hill think prediction markets are about to get a regulatory reality check. According to a Punchbowl News Canvass poll conducted on July 5, 2026, 53% of Congressional staffers believe legislation banning insider trading on prediction market platforms for government and military officials is likely to pass. Only 45% called it unlikely.
The Senate unanimously passed S. Res. 708 on April 30, 2026, prohibiting all senators, officers, and staff from trading on prediction market platforms. Over ten bills targeting prediction markets have been introduced in the current 119th Congress, with most focused on preventing the use of material nonpublic information, or MNPI, and enhancing oversight by the Commodity Futures Trading Commission.
A Defense Department official who knows about a troop deployment betting on geopolitical outcomes, or a congressional aide wagering on whether a bill will pass while watching the vote count in real time, illustrates the potential for abuse. Think of MNPI as the prediction market equivalent of a corporate insider knowing about a merger before it’s announced.
Kalshi and Polymarket both implemented new measures in March 2026 to curb insider trading, following guidance from the CFTC and growing pressure from lawmakers. That pressure came partly from the House Oversight Committee, which investigated prediction market platforms for potential insider trading patterns in May 2026, scrutinizing both Kalshi and Polymarket for whether government-connected traders were exploiting privileged information for profit.
Several bipartisan proposals have gone further than just banning officials themselves from trading. Some aim to extend prohibitions to family members of government officials, closing the obvious loophole of having a spouse place the bet instead.
Polymarket runs on Polygon, and Kalshi operates as a CFTC-regulated exchange. For Polymarket specifically, which processes trades on-chain, compliance with insider trading restrictions presents unique technical challenges. Blockchain transparency makes some forms of surveillance easier, since every trade is recorded on a public ledger. But pseudonymous wallets also make it trivial for a motivated insider to obscure their identity. Platforms will likely need to invest heavily in KYC and monitoring infrastructure.
The CFTC’s role is worth watching closely. If the CFTC ends up with expanded authority over prediction markets, it could strengthen the commission’s hand in broader digital asset regulation. With more than ten bills in play and the Senate already on record, the question isn’t really whether regulation is coming, but how aggressive it will be and whether it drives activity offshore to platforms beyond US jurisdiction.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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