Lawmakers Scrutinize Prediction Markets Amid Concerns Over Insider Trading

Bipartisan efforts in Congress aim to regulate online platforms that allow bets on everything from sports to geopolitical events

Apr. 17, 2026 at 10:42am

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A vibrant, abstract painting of political symbols like a gavel, ballot box, and dollar bills, repeated in overlapping, fractured geometric shapes and waves of color, conveying the chaotic and high-stakes nature of political prediction markets.The rise of prediction markets has sparked a bipartisan push in Congress to rein in these platforms and ensure they are not exploited for unethical gains.Hartford Today

A controversy has erupted over prediction markets like Polymarket and Kalshi, which allow users to bet on the outcome of various events. Lawmakers from both parties are pressing for greater regulation of these markets, citing concerns over insider trading and the potential for them to be used for unethical purposes, such as betting on the rescue of a U.S. airman captured by Iran. The Commodity Futures Trading Commission, which oversees prediction markets, is facing scrutiny over its ability to effectively police these platforms, many of which operate offshore beyond the agency's full jurisdiction.

Why it matters

The rise of prediction markets has raised alarms among lawmakers and regulators who worry they could be used for insider trading, undermining the integrity of sports and other events, and even profiting from the lives of U.S. service members. This has sparked a bipartisan push in Congress to rein in these markets and ensure they are not exploited for unethical gains.

The details

Lawmakers have introduced several bills to address the issues with prediction markets, including measures to bar federal employees from using nonpublic information to trade on these platforms and proposals to impose fees or outright bans. The Commodity Futures Trading Commission, which oversees prediction markets in the U.S., has also faced criticism over its ability to effectively police these rapidly growing platforms, many of which operate offshore beyond the agency's full jurisdiction.

  • On April 3, bets were placed on Polymarket on when a U.S. airman would be rescued from Iran.
  • In early April, Rep. Seth Moulton, D-Mass., shared a screenshot of the Polymarket activity on social media and blasted the 'dystopian death market'.
  • In February, Sen. Richard Durbin, D-Ill., sent a letter to CFTC acting chair Michael Selig noting the decline in enforcement attorneys at the agency's Chicago office.
  • On Thursday, Selig testified before the House Agriculture Committee, which oversees the CFTC, and said the agency was taking the potential of insider trading in prediction markets seriously.

The players

Polymarket

A prediction market platform that has come under particular scrutiny for its offshore trades that are beyond the reach of U.S. regulators.

Kalshi

A prediction market platform that says it already bans many of the most extreme betting markets and welcomes regulation.

Rep. Seth Moulton

A Democratic congressman from Massachusetts and former Marine who served four tours in Iraq, who has criticized prediction markets for allowing bets on the lives of U.S. service members.

Michael Selig

The acting chair of the Commodity Futures Trading Commission, which oversees prediction markets in the U.S.

Donald Trump Jr.

The former president's son, who is on Polymarket's advisory board and is a paid adviser for Kalshi.

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What they’re saying

“This is war profiteering and Congress needs to step in and stop it.”

— Rep. Seth Moulton, U.S. Representative

“Nothing is more important than protecting market integrity.”

— Michael Selig, Acting Chair, Commodity Futures Trading Commission

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.