WASHINGTON, D.C. — The U.S. Senate recently banned senators and their staff from trading on prediction markets. This action follows growing scrutiny over insider betting, ethics concerns, and legal challenges against platforms like Kalshi in several states.

Prediction markets are online marketplaces where individuals can bet on future events by purchasing shares of different potential outcomes. If a particular outcome occurs, the market pays out to those who correctly predicted it, with players betting against one another. These platforms generate revenue by charging transaction fees on each trade.

In spring 2026, NPR documented cases where campaign staffers working on statewide political campaigns admitted to using internal information about candidates' poll performance to place bets on their candidate's electoral prospects. These bets were placed prior to the public release of favorable polling data, which constitutes insider trading. Both Democrats and Republicans running for political office have faced criticism for betting on their own campaigns.

A nationally representative online survey conducted in March 2026 by Matt Motta and Robert Ralston found that nearly 70% of 1,000 U.S. adults supported a complete ban on government officials trading on prediction markets. Another 20% of respondents supported a more restricted ban that would apply when government officials possess insider information.

Despite the Senate's recent ban, the exact method of its implementation remains undefined. Additionally, other government employees, such as members of the House, executive branch employees, and military officials, are still permitted to bet on prediction markets.

Some lawmakers have proposed limiting trading when government officials have insider information about an event. Others in Congress have initiated efforts to ban all trading on "death markets," which involve wagering on events like war and assassinations. The introduced Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act, also known as the DEATH BETS Act, is currently awaiting committee review.

Kalshi, a prediction market platform, operates a section of its site specifically for election-related markets, including bets on the 2028 presidential election winner and margins of victory in the 2026 South Dakota primary elections. Kalshi also offers bets on whether the Supreme Court will ban transgender girls and women from competing on female sports teams and if the government will confirm alien existence before September 2026. The state of Massachusetts is currently suing Kalshi for allowing wagering through less regulated channels such as prediction markets rather than state-regulated casinos and sportsbooks. Estimates suggest this activity has cost states over $1 billion in tax revenue since prediction markets began allowing sports wagering in early 2025.