Senate Bans Lawmakers from Prediction Market Trading: No More Side Hustles!

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Senate Closes the Door on Prediction Market Participation for Lawmakers

Key Highlights

  • The rule prohibits senators from entering contracts tied to the outcome of real-world events.
  • The measure passed unanimously, reflecting rare bipartisan agreement on ethics safeguards.
  • Restrictions currently apply only to senators, excluding House members and staff.

On Thursday, the Senate unanimously approved a new rule prohibiting senators from trading on prediction markets. This decision aims to prevent conflicts of interest and address concerns about insider trading in this growing area.

As a crypto investor, I’m paying attention to this new bill Senator Bernie Moreno is proposing. Basically, it would stop senators from making deals where their payment depends on whether a specific event happens or doesn’t happen. It sounds like it’s aimed at preventing conflicts of interest, and could impact how lawmakers approach things related to future technologies – potentially even crypto.

I’m thrilled to announce that my bill prohibiting members of Congress from using insider information for personal gain in prediction markets has passed the Senate with unanimous support! Serving the public is a privilege, and Americans deserve to be confident that their elected officials are acting in their best interests, not seeking personal profit.

— Bernie Moreno (@berniemoreno) April 30, 2026

This rule impacts platforms like Kalshi and Polymarket, where people buy and sell contracts based on the outcomes of events in areas like politics, the economy, sports, and culture.

Following the vote, Congressman Moreno voiced his support for prediction markets on X, stating that holding public office is a privilege, not a way to make extra money. He believes Americans have a right to know their leaders are motivated by public service, not personal gain, and that officials shouldn’t use inside information to enrich themselves.

The resolution passed without any opposition, showing everyone agreed that politicians shouldn’t be betting on events affected by their work and special knowledge gained through their position.

This rule only affects senators – it doesn’t apply to House members, their staff, or other government employees. Importantly, it also doesn’t cover lawmakers buying and selling stocks, which continues to be a point of concern for ethics watchdogs.

Support from Polymarket and Kalshi

After the announcement, both Kalshi and Polymarket, which are platforms for prediction markets, shared their approval on X.

Kalshi CEO Tarek Mansour welcomed the Senate’s decision to prohibit senators and their staff from trading on prediction markets. He noted that Kalshi already prevents members of Congress from using its platform and actively works to prevent insider trading, and that this new rule will help build greater confidence in these markets by establishing a consistent standard across the industry.

Polymarket expressed strong support for this development in a post on X (formerly Twitter). They noted that their existing rules already ban this type of behavior, but making it law is a positive move for the industry, and they offered their assistance in moving the process forward.

This comes after Kalshi took action against three candidates running for Congress because they broke the platform’s rules about fair trading. These rules prevent people who could affect an event’s result from betting on it.

Ezekiel Enriquez, Mark Moran, and Matt Klein broke a rule set by Kalshi (Rule 5.17(z)). Enriquez bet less than $100 on the election for Texas’s 21st Congressional District, and as a result, he’s banned from the platform for five years and must pay a $784.20 fine.

Minnesota State Senator Matt Klein spent $50 on his campaign and, as a result, was fined $539.85 and prohibited from participating in campaigns for five years.

Okay, so I just heard about this candidate, Mark Moran, who ran for Senate in Virginia. Apparently, he was trading crypto while campaigning and even talked up the market to others. It backfired big time – he got a five-year ban from trading and had to pay a fine of over six thousand dollars. Definitely a cautionary tale – you can’t really be promoting investments while you’re actively trading them, especially when you’re a public figure!

The clear line

This decision happens while Congress is actively debating how to regulate prediction markets. Several bills have been proposed, some aiming to restrict the buying and selling of contracts related to elections, sports, or national security, and others suggesting stricter rules for trading confidential information.

The CFTC is also trying to define the legal rules for prediction markets and explain how they are different from traditional gambling.

By taking this action, the Senate has established a firm rule for its members: they shouldn’t use their positions for personal financial gain through investments based on events that could affect the public.

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2026-04-30 22:30