Schumer Pushes for Prediction-Market Ban Across Washington

Prediction Markets Insider Trading Schumer Ethics US Politics

May 4, 20263 min readNorth America

Schumer Pushes for Prediction-Market Ban Across Washington

Senate's new rule aims to curb insider trading risks nationwide.

Schumer Takes Prediction-Market Fight to House, White House

Schumer wants the Senate’s new prediction-market ban copied by the House and White House, turning an ethics rule into a cross-branch test.

Schumer is trying to make Senate self-policing the baseline for all of Washington. After the Senate approved a bipartisan resolution banning senators and staff from participating in prediction markets, he said the House and White House should adopt the same rule, arguing these bets pose a national-security risk and create obvious conflicts for officials with access to sensitive information. Schumer: House, White House must ban prediction markets bets Senate bans its own members and staff from betting in prediction markets

Why Schumer has leverage

The pressure point is simple: once the Senate has banned the practice for itself, House leaders and the White House have to explain why their officials should keep more discretion. In US Politics, that is a stronger position than simply denouncing gambling. It reframes prediction markets as an insider-access problem.

The White House has already moved partway there. In April, it warned staff that using nonpublic government information on prediction markets or other platforms would violate ethics rules and federal law, while also saying there was no public evidence that administration officials had done so. That is narrower than Schumer’s demand: a warning against insider trading is not a ban on participation. White House warns staff against insider trading on prediction markets | CNN Politics

What sharpened the politics was not election betting alone, but war-related betting. Reuters reported heavy trading around Iran-linked contracts, including $529 million on the timing of attacks and $150 million on the removal of Ayatollah Ali Khamenei; blockchain analysts said six accounts made about $1.2 million after being funded shortly before the strikes. That is the evidence base Schumer is exploiting: not that every market is corrupt, but that markets tied to state action can look like monetized foreknowledge. Prediction market bets on Iran strikes spur allegations of insider trading

The real fight is with regulators, not traders

Schumer’s problem is that he does not control the enforcement center of gravity. CFTC Chair Michael Selig has pledged a crackdown on insider trading in prediction markets and said the agency is pursuing hundreds of investigations, signaling a regulatory preference for policing abuse rather than outlawing participation outright. Trump’s top regulator for prediction markets pledges crackdown on insider trading

That matters for firms like Kalshi and Polymarket, and for the wider United States policy debate. Kalshi is federally regulated; Polymarket’s U.S.-regulated footprint is narrower, with some controversial geopolitical markets appearing on its international site. Legally, those distinctions matter. Politically, Schumer is trying to erase them by focusing on the bettor’s access to information, not the platform’s structure. White House warns staff against insider trading on prediction markets | CNN Politics

What to watch next

The next test is whether House leaders copy the Senate rule or settle for a softer ethics warning. After that, watch whether the White House upgrades its April memo into a formal executive-branch prohibition. If neither happens soon, Schumer’s move will look less like a new federal standard than a Senate-only containment strategy — with regulators still trying to manage the sector through enforcement, not a blanket ban. Schumer: House, White House must ban prediction markets bets White House warns staff against insider trading on prediction markets | CNN Politics Trump’s top regulator for prediction markets pledges crackdown on insider trading

Originally published by The Hill.

Sources (12)

White House warns staff against insider trading on prediction markets | CNN Politics

cnn.com

Trump’s top regulator for prediction markets pledges crackdown on insider trading | CNN Business

us.cnn.com

Prediction markets under pressure to crack down on rogue bettors and stop insider trading - The Washington Post

washingtonpost.com

Senate bans its own members and staff from betting in prediction markets - The Washington Post

washingtonpost.com

Senators ban themselves from participating in prediction markets - The Washington Post

washingtonpost.com

Arizona files landmark criminal charges against prediction market Kalshi | CNN Politics

cnn.com

Exclusive: Federal prosecutors are exploring whether prediction market bets trip insider trading laws | CNN Politics

cnn.com

U.S. government sues three states over efforts to regulate prediction markets - The Globe and Mail

theglobeandmail.com

How Kalshi, Polymarket are ushering in 'Wild West' of gambling

eu.usatoday.com

Prediction markets say they're different from sportsbooks. Gambling addicts say it's all the same - The Washington Post

washingtonpost.com

Kalshi prediction site suspends three political candidates | CNN Politics

edition.cnn.com

Prediction market bets on Iran strikes spur allegations of insider trading | CBC News

cbc.ca

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