Will Congress Ban Its Members from Trading Stocks? Prediction Markets Are Skeptical
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Prediction markets present merchants are skeptical that Congress will move a inventory buying and selling ban this yr, at the same time as lawmakers introduce new proposals and increase restrictions into areas like prediction markets.
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Legislative efforts are shifting from banning insider buying and selling to proscribing participation altogether, with Sen. Kirsten Gillibrand main proposals focusing on each inventory buying and selling and prediction market exercise.
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Lawmakers have moved rapidly to approve prediction market buying and selling bans, whereas broader inventory buying and selling restrictions, regardless of sturdy public help, have stalled for years, highlighting an uneven method to reform.
The Senate banned its personal members from buying and selling on prediction markets in lower than per week. A ban on inventory buying and selling has been stalled for years. And the very prediction markets now being restricted are pricing in lengthy odds that lawmakers will ever impose the extra significant limits on themselves.
That distinction sits on the middle of Washington’s uneven push to limit how authorities officers take part in monetary markets. Contracts on Kalshi and Polymarket monitoring a possible congressional inventory buying and selling ban have hovered round 11–18% for passage this yr, even after spiking briefly when the most recent bipartisan invoice was launched in January. However, a longer-dated Kalshi contract tied to the top of Trump’s second time period in 2029 sits close to 58%, suggesting merchants see it as a coin flip or higher over time slightly than a misplaced trigger.
The simpler query, prediction markets, moved quick. Sen. Bernie Moreno (R-Ohio) launched a decision on April 24 to bar senators and workers from buying and selling on prediction platforms. It passed unanimously six days later.
Sen. Gillibrand’s push traces shift from insider buying and selling guidelines to full bans
The broader effort to limit congressional buying and selling has been constructing for greater than a decade. Sen. Kirsten Gillibrand (D-N.Y.) was a key advocate for the 2012 STOCK Act, which made specific that members of Congress are topic to insider buying and selling legal guidelines and can’t commerce on nonpublic info, however stopped in need of banning buying and selling outright.
In January, she and Sen. Ashley Moody (R-Fla.) launched the Restore Trust in Congress Act, a bipartisan bill proposing to bar members, spouses, and kids from proudly owning or buying and selling particular person shares totally. The Senate measure builds on a House model of the invoice launched in September 2025 by Rep. Chip Roy (R-Tex.) alongside a bipartisan group of lawmakers, which has attracted greater than 100 co-sponsors. Efforts to drive a vote on the House invoice by way of a discharge petition have to date fallen quick.
In announcing the legislation, Gillibrand’s workplace cited polling displaying that 86% of Americans help passing a invoice to ban members of Congress from buying and selling particular person shares, pointing to widespread public backing for such restrictions.
Gillibrand is now extending that method to prediction markets, introducing the Prediction Market Act of 2026 with Sen. Dave McCormick (R-Penn.). The invoice which might bar all members of Congress and senior govt department officers from buying and selling occasion contracts on prediction markets.
The proposal, just like the latest Senate ban, would prohibit participation outright, slightly than depend on current guidelines in opposition to buying and selling on nonpublic info, mirroring the shift seen in inventory buying and selling proposals that transfer past insider buying and selling restrictions to full bans. The invoice would additionally direct the Commodity Futures Trading Commission (CFTC) to determine clearer insider buying and selling requirements for prediction markets and impose consumer protections like danger disclosures, age verification, and safeguards for buyer funds.
“Elected officers must be working for the individuals they signify — not lining their very own pockets with insider info,” Gillibrand stated in a news release. “Americans deserve monetary markets which might be truthful, clear, and never tilted in favor of these with privileged entry.”
Kalshi CEO Tarek Mansour, who has been vocal in backing legislative efforts to curb insider buying and selling, expressed help for the invoice in a publish on X, calling it a “complete and considerate method.”
Trading ban odds spike on invoice introduction however level to low probabilities this yr
Prediction markets monitoring a possible ban on congressional inventory buying and selling present merchants reacting to legislative developments however current low odds for passage within the close to time period.
On Kalshi, the contract on whether or not a ban will take impact earlier than the top of 2026 surged from roughly 8% to as high as 40% on Jan. 12, instantly after the introduction of the Gillibrand-Moody invoice, marking an all-time high. But the spike was short-lived. As of May 6, the identical contract was buying and selling round 11%, suggesting merchants see little likelihood of a ban being enacted this yr.
Kalshi’s longer-dated contract, which tracks whether or not a ban will likely be in place by the top of President Donald Trump’s second time period, Jan. 21, 2029, confirmed an identical response, climbing as high as roughly 84% shortly after the Gillibrand-Moody invoice introduction earlier than trending decrease. That contract was buying and selling round 58% as of May 6, suggesting merchants see a greater risk of a ban over time, with longer-dated pricing probably influenced by expectations round future shifts in congressional party control.
Markets on Polymarket present a comparable sample. The platform’s contract on whether or not a inventory buying and selling ban will move earlier than the top of 2026 reached a high of about 34% in mid-January earlier than falling to a low of 11% in late April and rebounding to round 14% as of May 6.
Trading exercise in each markets has been comparatively restricted. Kalshi’s contracts have drawn roughly $240K in quantity since launching in December, whereas Polymarket’s market has seen about $17K traded since its introduction in November. The pricing and exercise recommend that whereas merchants reply to legislative developments, they continue to be skeptical that Congress will enact a inventory buying and selling ban this yr, a dynamic that additionally raises questions in regards to the probability of extending related participation bans to prediction markets.
Quick motion on prediction market bans contrasts with stalled inventory buying and selling efforts
The latest Senate vote to bar members from prediction market buying and selling underscores how rapidly narrower restrictions can transfer. Sen. Moreno (R-Ohio) launched a decision on April 24 to ban senators and their workers from buying and selling on prediction markets, and it handed unanimously in simply six days. Lawmakers have since known as for extending these restrictions. Rep. Dina Titus (D-Nev.) has launched similar legislation for House members and workers, whereas Senate Majority Leader Chuck Schumer has urged expanded action to bar prediction market participation by House members, whereas additionally calling for “a complete federal ban protecting each authorities official, staffer, and worker throughout the chief department.”
Those efforts stand in distinction to repeated makes an attempt to ban congressional inventory buying and selling, which have didn’t advance regardless of years of bipartisan proposals. Lawmakers have launched a sequence of payments because the STOCK Act, together with the TRUST in Congress Act (2025) and the Ban Conflicted Trading Act (2021), however none have been enacted into regulation.
The distinction displays what’s at stake. A inventory buying and selling ban would instantly have an effect on how lawmakers handle private investments, an space the place many members actively take part. Restrictions on prediction market buying and selling, by comparability, possible apply to a a lot smaller slice of economic exercise for lawmakers.
The result’s an uneven push in Washington, as lawmakers transfer rapidly on narrower restrictions whereas efforts that might impose extra significant limits on their very own monetary exercise stay unsure.
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