House Oversight Committee bars officials from prediction market trading

House Oversight Committee moves to bar officials from prediction market trading

The House Oversight Committee released a staff memorandum Friday recommending that Congress consider banning federal employees, military personnel, and security clearance holders from trading on prediction markets including Kalshi and Polymarket.

The memo follows an investigation that gathered nearly 1,700 pages of documents and included five bipartisan staff briefings with platform representatives on how they detect and report suspicious activity. Chairman James Comer said existing insider trading prohibitions under the Commodity Exchange Act, as amended by the STOCK Act, already apply to prediction market contracts, but argued the committee needed to weigh further restrictions to close any remaining gaps.

The proposed measures range from an outright trading ban for federal personnel to narrower limits on contracts tied directly to government decisions. The committee credited Kalshi and Polymarket for self-policing, noting that most insider trading incidents in the sector were first detected and reported to regulators by the platforms themselves. Polymarket recently deployed surveillance software called PolyGraph, developed with analytics firm Chainalysis.