The US Senate has unanimously passed a resolution prohibiting senators and their staff from trading on prediction markets such as Kalshi and Polymarket. The measure takes effect immediately and simultaneously amends internal Senate rules. As a result, the President's signature is not required.
Senator Bernie Moreno (R-Ohio) initially introduced the proposal on 24 April 2026. Subsequently, Senator Alex Padilla (D-California) extended it to Senate staff via amendment. The trigger for the ban is a series of insider trading scandals involving Polymarket bets on classified military operations and political events.
Subscribe to our newsletter
The best articles of the week, directly delivered into your mailbox.
Van Dyke case sparks regulatory wave
At the centre stands the indictment against Master Sgt. Gannon Ken Van Dyke. The 38-year-old from Fayetteville, North Carolina, is a member of the U.S. Army Special Forces. Specifically, the US Department of Justice indicted him on 23 April 2026. The background is Van Dyke's involvement in "Operation Absolute Resolve", the mission in which the US military captured Venezuelan President Nicolás Maduro and his wife Cilia Flores on 3 January 2026.
According to the DOJ, Van Dyke opened a Polymarket account as early as 26 December 2025 and wagered 33,933 USD on four Venezuela- and Maduro-related markets. Moreover, the largest single stake of 32,537 USD went to the market "Maduro leaves office by 31 January". From this, he ultimately generated 404,222 USD in profit, a return of 1,242%. In addition, on 2 January 2026 alone, one day before Maduro's arrest, he placed more than 26,000 USD of his bets.
In total, the DOJ has filed five charges: three counts of violating the Commodity Exchange Act, wire fraud and unlawful monetary transaction. Therefore, the maximum penalty adds up to as much as 60 years in prison. However, on 28 April 2026 Van Dyke pleaded "not guilty". Polymarket, by contrast, cooperated with the DOJ and reported the user to the authorities.
Iran bets and Kalshi suspensions intensify pressure
Alongside the Van Dyke case, the Associated Press reported on a group of newly created Polymarket accounts that placed precise bets on a US-Iran ceasefire on 7 April 2026. The wagers were placed hours before Donald Trump's official announcement and earned those involved hundreds of thousands of dollars in profits. Furthermore, Roll Call cites at least 50 new accounts behind these bets.
Previously, on 22 April 2026, Kalshi had already suspended and sanctioned a US Senate candidate and two House of Representatives candidates. The accusation was political insider trading on their own campaigns. In doing so, the regulated CFTC platform demonstrated its own control mechanisms. However, this did not stop the political headwinds.
Kalshi CEO Tarek Mansour publicly welcomed the resolution and pointed out that the platform already proactively blocks members of Congress and enforces against insider trading. Consequently, the unanimous passage without a roll-call vote shows how strong the bipartisan consensus behind the ban has now become.
Further legislation in preparation
The Senate resolution, however, is only the fastest part of a broader legislative push. Back on 5 March 2026, Jeff Merkley (D-Oregon) and Amy Klobuchar (D-Minnesota) introduced the "End Prediction Market Corruption Act" (S. 4017). This bill would fully bar the President, Vice President and members of Congress from prediction market trading. In addition, violations would carry fines of up to 10,000 USD per case. The CFTC would also gain new investigative powers. Co-sponsors include Chris Van Hollen, Adam Schiff and Kirsten Gillibrand.
In the House of Representatives, by contrast, Adrian Smith (R-Nebraska) and Nikki Budzinski (D-Illinois) have introduced the narrower "PREDICT Act". This bill bans government officials and their families from trading only when they hold "material nonpublic information", that is, insider information. Another bipartisan proposal also comes from Todd Young (R-Indiana) and Elissa Slotkin (D-Michigan). On 30 April, Democratic members of Congress finally called on the CFTC to issue a corresponding rule. The aim is to generally ban event contracts on elections, wars, military actions, sports and government actions where there is no economic hedging interest.
The political constellation is striking. Donald Trump Jr. advises both Polymarket and Kalshi. At the same time, Trump's social media platform Truth Social is launching its own crypto-based prediction market called "Truth Predict". Moreover, on the day of the AP report on the Iran bets, the White House warned its staff against using private information for prediction market wagers.
Industry context and regulatory situation
Polymarket operates on a crypto basis via Polygon and USDC. Kalshi, by contrast, is a CFTC-licensed Designated Contract Market (DCM). Back in 2022, the CFTC fined Polymarket 1.4 million USD because the platform had admitted US users without registration. Since then, Polymarket has been blocked for US IP addresses. Van Dyke, however, circumvented this block by technical means. By contrast, Kalshi obtained approval to offer election outcome contracts in 2023 after a lengthy legal dispute with the CFTC, thus setting a precedent for political event contracts in the United States.
The case does not stand in isolation. Back in February 2026, authorities in Israel arrested several people and indicted two for using classified information for Polymarket bets on Iranian military operations. Van Dyke is therefore the first US case of this kind, but the second globally documented incident in which participants monetised military operational knowledge through prediction markets.
The Senate resolution itself, however, has narrow limits. For example, it does not apply to the House of Representatives and also carries no criminal sanctions. Instead, it relies on internal mechanisms such as censure or expulsion in the event of violations. In addition, concrete enforcement procedures remain unclear so far. The actual penalty framework for insider trading on prediction markets therefore does not stem from the Senate resolution but from the Commodity Exchange Act with up to ten years in prison per violation, as the Van Dyke charge shows. A nationwide, enforceable law such as S. 4017, by contrast, must pass both chambers and the President.
