House Memo Targets Officials’ Prediction Market Bets
House Oversight staff called on Congress to curb officials' prediction market bets on government actions and political outcomes in a November 13 memo.
The November 13 memo specifically targets officials who engage in prediction market trading, leaving the platforms' business operations intact. The committee initiated its probe in May and expanded it to five platforms in September.
The size of this growing market is evident in Robinhood's financial results, which show event contracts revenue surged more than sixfold year over year in Q3 2026, reaching $173 million.
Congressional Restrictions Proposed
The committee recommends two main steps: restricting officials across all branches from prediction markets through either an outright ban or limits on government and political contracts, and requiring platforms and regulators to share data to enforce these limits.
These restrictions would apply even when officials trade without inside information. The Senate already banned senators and their staff from prediction markets in April, while the Department of War has barred personnel from using prediction markets for personal financial gain.
Enforcement Actions Highlight Concerns
The memo cites three CFTC enforcement cases: former Congressman George Santos was ordered to pay $35,000 for manipulative trading on a Kalshi contract; White House teleprompter operator Gabriel Perez paid $172,000 over Kalshi mention contracts; and Google engineer Michele Spagnuolo allegedly made $1.2 million using nonpublic search data on Polymarket.
The memo says platform reporting like this has let the CFTC bring enforcement actions.
Platforms Position Themselves as Partners
The memo notes that platforms first detected and reported most known insider trading cases themselves, positioning them as partners in enforcing proposed limits. Kalshi CEO Tarek Mansour had already backed insider trading bans for members of Congress.
The growing industry faces potential challenges from Senator Elizabeth Warren expected to chair Senate Banking in January, CFTC warnings to Kalshi over new contract notices, and Connecticut's cease-and-desist orders to nine companies including Robinhood and Polymarket over sports contracts.
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