10 ms·
U.S. Senators Vote to Ban Themselves from Trading on Prediction Markets
- ASalazarMX 5mo ago"Prediction market" sounds much better than online gambling.
- choward 5mo agoIt's not gambling if you have information that most of the world doesn't have.
- micah_chatt 5mo agoWhat about Senate staff?
- caymanjim 5mo agoThe article specifically mentions staff, even in the short snippet before the paywall. the rules apply to senators, officers and staff
- rvz 5mo agoGood. Now they should also ban themselves from insider trading in both the public stock market and private markets as well as prediction markets.
- java-man 5mo agoBut it's so... profitable!
- riotnrrd 5mo agoThis was done in 2012: https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act
- lapetitejort 5mo ago> A member, officer, or employee of the __Senate__ shall not receive any compensation, nor shall he permit any compensation to accrue to his beneficial interest from any source, the receipt or accrual of which would occur by virtue of influence improperly exerted from his position as a member, officer, or employee. Emphasis mine. This does not cover the judicial or executive branch
- IAmBroom 5mo agoNor even the House of Representatives.
- handedness 5mo agoThe STOCK Act mostly only had the effect of creating some inconveniences for lawmakers (e.g., their families could still trade based on their guidance), and even that was only the case for a year as Senator Reid's House bill S.716 effectively gutted the STOCK Act and restored the status quo, was passed by unanimous consent after 14 seconds of discussion, and was signed into law by President Obama: https://en.wikipedia.org/wiki/STOCK_Act#Amendment https://en.wikipedia.org/wiki/STOCK_Act#Amendment https://www.congress.gov/bill/113th-congress/senate-bill/716 https://www.congress.gov/bill/113th-congress/senate-bill/716
- tt24 5mo agoThey should do this, but only because senators and congresspeople are terrible at trading stocks and they generally average below SPY. There’s like 2 famous exceptions, other than those they are simply abysmal traders because their information isn’t worth very much. This problem is so overstated, it’s popular because it’s vaguely populist and exhibits an anti elite sentiment
- vkou 5mo agoThat's a good start, and should be followed by banning everyone else from trading on them.
- idle_zealot 5mo agoI agree in spirit, but really it should be the other way around, no? People aren't banned from using them, companies are banned from offering them. I do not want to see a future in which people get their doors knocked down because they're under suspicion of using a gambling app.
- jocaal 5mo agoWhy though. This is a dead serious question, what is the difference in using financial derivatives and prediction markets. Both are a transaction between parties that is influenced by some other underlying event. Why is it ok for the event to be a stock price, but not ok for it to be a sports match?
- bulbar 5mo agoBecause it isn't limited to seemingly innocent sports matches.
- armada651 5mo agoThe financial derivatives are (supposed to be) regulated, there's laws against insider trading that keep the market fair. For sports betting there's laws against match fixing. The prediction market CEOs on the other hand seem to be actively encouraging insider trading and match fixing, it's practically their main selling point.
- HDBaseT 5mo ago[dead]
- danesparza 5mo agoANY government employee or government contract worker should be banned from trading on prediction markets.
- giarc 5mo agoThe US federal workforce is ~2.2 million people. Banning them all from trading on prediction markets isn't the right move. A cafeteria worker in some suburban admin office likely has no inside information they are going to trade on. Members of congress and other high level positions on the other hand should be banned.
- bombcar 5mo agoArguably they should ban all US residents, citizens, and immigrants from prediction markets.
- ohnei 5mo agoWhy stop at prediction markets? Trading in markets is heavily tied to information or information processing advantage so probably all assets should be held by the government to avoid conflicts of interest involving self interests.
- throwway120385 5mo agoReducto ad absurdum doesn't work here. You have to show that there's a desire and a rationale for going from limiting betting markets like Kalshi and limiting "investment" markets, which you haven't done. What you have left is a salty quip. There's an obvious opportunity to use insider information or insider influence to create a particular outcome on Kalshi. Like I could trade on the likelihood of a power outage in my city tomorrow or the next day and then in order to make good on the "trade" I could just drive a vehicle into the substation. Or I could do something more insidious. But the fact that my incentives are aligned by Kalshi with me blowing up a power substation means that Kalshi is a net negative even though individuals could make money from it. There's a difference between betting on the outcome of an event and investing in a company, although companies like Kalshi and Polymarket like to try to erase that difference. Investments are all notionally conditioned on a company meeting performance goals, and that incentive is aligned with the desire of company employees to also meet performance goals. Companies also generally align around some kind of useful output like washing machines or clothing which are beneficial in some way. What is useful about betting on the color of the sky at sunset in Lisbon on September 28th?
- delichon 5mo agoAll of the other markets are prediction markets too, in terms of opportunities to profit from inside knowledge. This is like vowing to quit smoking ... Marlboros.
- lapetitejort 5mo agoWould Martha Stewart be sentenced to prison for lying to federal investigators regarding her "prediction" of the release timing of her next cookbook?
- JuniperMesos 5mo agoMaybe, lots of things count as lying to federal investigators. I don't assume this is necessarily a just legal outcome though.
- perfectstorm 5mo agogood. and the restriction shouldn’t stop at U.S. Senators. anyone with a major influence in their field should be banned from using these prediction/betting apps. as an NBA fan, I was shocked when I saw the reports about Milwaukee star Giannis allegedly using Kalshi to “predict” his own future team during the last NBA trade deadline. how is that even allowed? he even went on to promote the prediction app the day after the trade deadline.
- blazespin 5mo agoPure gaslighting. The PM panic is because people want to look like they 'care' about corrupt trading. It's peanuts compared to the 500M they were betting on oil futures.
- jadbox 5mo agoNote that this is just a code of conduct change for the ethics committee, not a law. Something is better than nothing.
- HDBaseT 5mo agoHow do you police "major influence"? We've seen OpenAI employees get caught insider trading on prediction markets for new model releases. Every human is privy to some sort of exclusive information. Polymarket and the likes offer predictions on just about everything that has any relevancy. Sports, Technology, eSports, Politics. You don't have to have "major influence" to be a beneficiary of insider trading.
- ribosometronome 5mo agoAny lawyers able to comment on the actual wording of the resolution? It kind of reads to me like in their effort to narrowly capture just prediction markets like Kalshi but not stock markets, they've perhaps unintentionally barred themselves from some other unintended things, too. https://www.moreno.senate.gov/wp-content/uploads/2026/04/FILE_2525.pdf https://www.moreno.senate.gov/wp-content/uploads/2026/04/FIL... >No Member of the Senate may enter into, or offer to enter into, an agreement, contract, or transaction that provides for any purchase, sale, payment, or delivery that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of a specific event. Kind of seems like Senators would now be barred from like getting home or life insurance and certain kinds of casino gambling. Or like, making an offer on a home that is rescindable upon a failed inspection?
- alex43578 5mo agoNot a lawyer, but that sounds like the language regulating swaps.
- knollimar 5mo agoWhat about options and futures?
- blazespin 5mo agoNo, because that's real money.
- CGMthrowaway 5mo agoThis is rules of the Senate, not law, so everything is up to interpretation by the Ethics Committee. And we know how that goes
- jrmg 5mo agoOr buying health insurance? Edit: I guess that’s not dependent on a ‘specific’ future event.
- deleted 5mo ago[deleted]
- deleted 5mo ago[deleted]
- nickpsecurity 5mo agoDon't many already do something similar by insider trading on the stock market? Maybe they didn't need more uncertainty in their portfolios.
- bitshiftfaced 5mo agoPrediction markets have realized that they will lose potential customers if they don't prevent insider trading. Kalshi already has a policy banning politicians from trading. Presumably they understand this, so while I'm glad to see the rule, I wouldn't say it's that self-sacrificing.
- SoftTalker 5mo agoIf they are smart they will stay ahead of government regulation by voluntarily restricting certain types of trading.
- josephscott 5mo agoGood - now do a ban on individual stock trading.
- arjie 5mo agoWe've learned that these tools are only as effective as the tools of enforcement. A valid technique now available to us is to ban some activity that has valuable returns, then participate in it nonetheless, and simply not enforce action except against those of an opposing tribe. Presumably, violations of this ban simply lead to a hearing before an ethics committee staffed to lean towards the appropriate direction? Still, it is something. Some chilling effect is better than none. While we do this, it is worthwhile to make prediction markets accessible to our opponents. Ideally, those in corrupt countries aligned against us should be leaking as much information through the markets to us and we should enrich them for it. I'd love to have this kind of distributed espionage with the largest number of bets being on the actions of those aligned against us.
- yalogin 5mo agoSo they can vote themselves out to do the right thing, and they purposefully allowing themselves to invest in the stock market with insider information. My cynicism tells me they are throwing this bone to divert attention from the stock market loophole
- williamtrask 5mo agoi'm not sure it's productive to think this way. senators could be making more money on prediction markets. they took a nice step which will lead them to make no money on prediction markets (less money overall). it also sets a precedent which could easily be applied to the stock market. what you're saying is probably on the mind of at least one Senator, but all things considered, this feels like a net-positive move which they didn't have to do.
- nemomarx 5mo agoI get what you're saying but they did also vote themselves a restriction on stock trading in 2012, so the same behavior as this? If prediction markets get really profitable you might expect the same loophole there too.
- cowpig 5mo agobetter is always good when something you think is bad gets better but not better enough, say "more please"
- williamtrask 5mo agoi like your comment better than mine. more please.
- yalogin 5mo agoNice! I like it
- xrd 5mo agoI just can't understand how this prevents, say, the son -in-law of the president (totally unelected) going to negotiate for peace in Iran, while his brother in law is on the board of Polymarket and a strategic advisor to Kalshi. This is going to ruin interesting conversations at their holiday dinners!
- swingboy 5mo agoHow can you even trace it if they’re using crypto?
- the13 5mo agoJust prediction markets? They should be banned from all trading and active investing, period.
- adverbly 5mo agoExactly! If we're gonna give this actual attention, we should be focusing on the fact that they should be banned from any form of insider trading or major conflict of interest!
- strulovich 5mo agoThey are blocked from insider trading I think this in the previous comment undervalue just how many more complicated ways there are for corruption to bubble. Assume super strict rules. Consider this example to circumvent them: Senator-elect A makes an LLC and invest their money (with some friends) in it (before taking office) They can’t even talk to the money manager. But the manager can see their actions, and the senator can know their ow investments and work in their favor.
- nyc_data_geek1 5mo agoUnusualWhales begs to differ
- aanet 5mo ago+1000
- roncesvalles 5mo agoBut then how will they make money? They only make a $174k base salary and a 15% cap on how much they can earn from other employment sources. I'm only saying this semi sarcastically. Often the senator's aides earn more than the senators themselves.
- qwertyuiop_ 5mo agoWhat’s the ceiling ? https://www.quiverquant.com/congresstrading/politician/Nancy%20Pelosi-P000197 https://www.quiverquant.com/congresstrading/politician/Nancy...
- fhn 5mo agoWhat about friends, family, neighbors, and benefactors? Prediction markets should be illegal period.
- cortesoft 5mo agoThere is a valid purpose for (some) trades in a prediction market, namely as a form of insurance/risk management for specific risks a company or individual might have. For example, if you are a company whose current business would be severely hurt if a particular piece of legislation passes, it might make sense to hedge that risk by placing a bet on a prediction market that the legislation will pass. That way, if your business is hurt by the legislation, you can use the proceeds to offset the harm and pivot to something else. Of course, that doesn’t explain most prediction market contracts, but that is the idea at least.
- worik 5mo agoAnd another thing... What is the harm of malfunctioning insider dominated prediction markets, other than those hedging possibilities evaporating? I am not taking a position, I am wondering. When they started they were an academic curiosity and experiment. Now they are becoming a social phenomenon are they more harmful than, say, stamp collecting? "Fools and their money" is OK so long as the fools are truly volunteering, surely?
- vkou 5mo agoThey create another financial incentive for insiders to make decisions focused solely on personal profit, rather than good stewardship of whatever they are in charge of. I don't give a shit about the addicts losing their money on those markets, I don't want bad decisions to be made that affect me, when the main incentive for making them is fleecing the addicts of their money. They are just bribery with extra steps.
- robomartin 5mo agoAlmost there... Both for Senators and Representatives: - Term limits (2 consecutive terms max) - No stock market participation in any form during office - No corporate or PAC contributions - Prison for lying to the public or during the course of their work (hearings, media, etc.) - Serious legal consequences for defamation or libel - No special medical/healthcare insurance, accounts or treatment - Pensions only bases on their own contributions, nothing else - No lifetime pensions or healthcare - This one is tough: Consequences for campaign promises not met (part of no lies) - Consequences for shutting down government - Serious consequences for not balancing the budget or driving meaningful reductions that will result in a balanced budget in short order - No media-related jobs for five years after leaving office - No book deals for five years after leaving office - No movie deals for five years after leaving office - No fancy office anything that costs more than your average Ikea/Walmart office furniture - Severe consequences for illicit enrichment; a bartender cannot come out of Congress a multi-millionaire, period. In other words, like any real job by average citizens. They should not be a privileged and protected class.
- IAmBroom 5mo agoVery few if any of these are applicable to "any real job by average citizens".
- robomartin 5mo agoFailure to understand the general idea I guess? Politicians enjoy a pile of benefits and privileges that the average citizen has no access to at all. Simple example: They can lie to you and suffer no consequences. If you lie to them, even a minor lie, you can end up with serious criminal charges. You took the list as literally applying to average citizens. You took this part: "In other words, like any real job by average citizens." and completely ignored the next sentence: "They should not be a privileged and protected class." That's the point. They are supposed to work for us and represent us, and yet they fly far above us at so many levels it is incredible. This is what students should be demonstrating about. It is destructive and equally corrupt regardless of political party. In other words, it should be a universal truth (no party exceptions) that politicians should not exist as a class above those who elect them. Simple examples are health insurance, consequences for lies, fully paid lifetime benefits and pensions, etc. This is wrong.
- jrmg 5mo agoKalshi and its peers are legal because they’re commodity futures trading, not gambling.¹ Are senators not allow to buy any commodities futures now (it reads like it)? ¹I, and I think most reasonable people, think this is ridiculous - it’s obviously gambling in a trenchcoat, but that’s what they claim…
- antasvara 5mo agoTo be fair to traditional futures, they don't technically depend on the occurrence or non-occurrence of a specific event. They're an agreement to buy X asset at Y price on Z future date. You may lose money by being forced to buy oil at an above-market rate, but your contract doesn't say anything about the market rate at date Z (as far as I'm aware). Whereas prediction markets (and some other stock market/commodity option contracts) are explicitly tied to an event. They're saying "I'll give you $1 if this clearly defined event occurs."
- warbaker 5mo agoThe real with prediction markets problem is that people can make bets, then alter outcomes to match those bets. This is a well-known issue in sports betting (e.g. taking a fall), and I don't see how we're going to prevent it for things that matter a whole lot more than sports.
- ericzundel 5mo agoAlso, a bet in these markets can be used to alter outcomes. That problem is caused by journalists reporting on market activity. It is treated (or percieved by readers) as if it reflects popular sentiment. Not only is it possible, it's actually relatively cheap to do things like corner the market, which in some cases is a lot less expensive than, say, a national TV ad campaign or running a scientific poll. Link to an older article: https://insights.som.yale.edu/insights/dont-trust-the-political-prediction-markets https://insights.som.yale.edu/insights/dont-trust-the-politi...
- nickvec 5mo agoPrediction markets need to be banned entirely. It’s asinine that Kalshi and Polymarket are even a thing.
- totalmarkdown 5mo ago[dead]
- PeterStuer 5mo agoAlso their spouses? :D
- Snowfield9571 5mo agoWhat about their family? What about staffers? What about anyone in the room when insider information is being shared? Good first step but plenty of ways around this. Not really that significant. Do stock trading next.
- edge_trader_41 5mo ago[flagged]