The U.S. Senate on Thursday unanimously passed a rule barring senators and staff from using markets such as Kalshi and Polymarket.
The vote comes after an Army Special Forces master sergeant was charged with using classified intelligence about the capture of then-Venezuelan President Nicolas Maduro to profit on the prediction market Polymarket.
Prosecutors say he cleared more than $400,000 on the trades in what authorities describe as the first criminal insider-trading case involving a U.S. event-betting platform.
Gannon Van Dyke has pleaded not guilty.
Last week, Kalshi announced it has suspended and fined three political candidates who made trades on the regulated prediction market.
Mark Moran, an independent running for U.S. Senate in Virginia, Ezekiel Enriquez, a former Republican congressional candidate in Texas, and Matt Klein, a Minnesota state senator running for Congress as a Democrat, were caught making trades, Kalshi said.
"Just like in traditional financial markets, bad actors will try to cheat," said Bobby DeNault, Kalshi's head of enforcement and legal counsel.
"Regulated exchanges must constantly evolve and adapt their systems to address insider threats," DeNault added.
"These three cases are an example of how developing proactive engineering solutions can help identify illicit trading activity," he said.
Kalshi and Polymarket both praised the Senate vote.
"I applaud the Senate for passing this resolution to ban Senators and their offices from trading on prediction markets," Kalshi CEO Tarek Mansour wrote in a post on social media.
"Kalshi already proactively blocks members of congress and enforces against insider trading. This is a great step to increase trust in our markets by making it an industry standard," Mansour added.
Mansour said he wanted to see the House of Representatives pass a similar vote.
"We're in full support of this. Our Rulebook & Terms of Service already prohibit such conduct, but codifying this into law is a step forward for the industry," Polymarket wrote on social media. "Happy to help move this forward however we can."
Sam Barron ✉
Sam Barron has almost two decades of experience covering a wide range of topics including politics, crime and business.
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