The chair of the House Oversight Committee calls for a ban on government officials participating in prediction market trading

Chairman James Comer of the House Oversight Committee, a Republican, has called for new restrictions on government officials' participation in prediction markets, including the possibility of a complete ban. The committee released the conclusions of an investigation that began in May of this year on Friday, which examined the risks of government officials, military personnel, and those with security clearances using insider information to place bets in prediction markets. Comer stated that the committee reviewed 1,700 pages of documents and heard five bipartisan staff briefings provided by prediction market companies.

Comer stated that Congress must consider further reforms to prevent public corruption and restore the American people's trust in the government. The committee believes that relevant reforms should legislate restrictions on the types of bets federal employees, lawmakers, and congressional staff can participate in within prediction markets, or directly implement a complete ban. The committee's memorandum noted that whether a complete ban on prediction market trading is imposed or only restrictions on certain contracts related to government, applying such restrictions to officials across all branches of government would reinforce the ethical expectation that government personnel should not use non-public information obtained through their positions for personal financial gain.

This concern has intensified over the past year, stemming from an active-duty U.S. Army soldier using confidential information to bet on Polymarket before the arrest of former Venezuelan President Nicolás Maduro, after which government personnel, including a former White House teleprompter operator, were also found to have profited from insider information. The committee also suggested that Congress push for prediction market companies to share necessary information with federal agencies to enforce restrictions. Both Kalshi and Polymarket have stated that they have taken measures to strengthen controls, and in April of this year, the Senate passed a resolution banning lawmakers from trading in prediction markets.