Rep. Torres Proposes a Bill to Ban Bets by U.S. Elected Officials

TLDR

• Rep. Ritchie Torres will introduce a bill to prohibit federal officials from betting on political prediction markets.
• The legislation targets use of nonpublic information for profit, aiming to safeguard against insider trading by government employees.
• A $30,000 bet on Polymarket about Maduro’s removal earned $436,000, prompting ethical concerns and legislative action.
• Polymarket lacks insider trading rules, with its CEO defending market transparency through incentivized information sharing.
• Kalshi enforces strict insider trading policies and supports regulatory efforts that align with the proposed legislation.

Rep. Ritchie Torres is preparing legislation to ban government officials from using prediction markets tied to political outcomes, following a controversial bet involving Venezuelan President Nicolás Maduro. A Polymarket user profited over $400,000 by wagering on Maduro’s departure just before his reported capture.

Bill to Ban Insider Trading in Prediction Markets

Rep. Torres plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026 to restrict federal officials’ use of prediction platforms. The proposed bill will prohibit elected officials, political appointees, and executive branch employees from betting on markets related to government actions.

It will also bar them from using nonpublic information to place trades or profiting from insights tied to their official duties. A spokesperson confirmed the bill aims to prevent the manipulation or misuse of privileged data for financial gain. The initiative follows revelations about a $30,000 bet on Maduro’s exit that returned over $436,000 the next day.

The wager was placed through Polymarket, a blockchain-based prediction market, one day before Maduro’s reported capture. The timing raised questions about whether the bettor had prior knowledge of the political event. The bill seeks to eliminate such conflicts by creating clear boundaries for public officials’ market activities.

Polymarket’s Role and Reaction

Polymarket currently lacks rules against insider trading and does not prohibit bets from government insiders. CEO Shayne Coplan has previously defended this model, suggesting that market incentives can promote information transparency.

“What’s cool about Polymarket is that it creates this financial incentive for people to divulge the information,” Coplan said. However, the timing and size of the Nicolas Maduro bet prompted scrutiny from lawmakers and competitors in the prediction space. Polymarket has not commented on the proposed legislation.

The platform continues to host various political markets without any declared mechanism to verify user affiliations or access to information. The company remains under regulatory attention after previous enforcement actions from the Commodity Futures Trading Commission. Its stance contrasts with other operators in the space.

Kalshi Maintains Insider Trading Ban

Unlike Polymarket, Kalshi enforces policies that restrict trades from individuals who influence market outcomes. According to Kalshi, a government official would have been blocked from making the Maduro trade under their terms.

The company prohibits “decision-makers” with influence over an event’s result from participating in related markets. Elisabeth Diana, Kalshi’s spokeswoman, said the platform supports efforts to prevent insider trading. She stated, “We already ban the activity it cites and are in support of means to prevent this type of activity.”

Kalshi claims to have safeguards in place to monitor for improper trading and routinely reviews transactions to ensure compliance. The company also requires identity verification that could reveal government affiliation. Kalshi expressed openness to legislative review but emphasized its existing policies already reflect the bill’s intent.

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