House Oversight memo says Congress should weigh barring officials from prediction markets

Congress should consider barring government officials from trading on prediction markets, or at least restricting the contracts they can trade, according to a memo from committee staff to the majority members of the House Committee on Oversight and Government Reform, released on Friday, November 13. The memo comes from the committee's inquiry into the risk of insider trading on platforms such as Kalshi and Polymarket by government officials, military personnel and people with security clearances.

What the committee found

Prediction markets let users trade contracts that pay out depending on whether an event happens, such as an election result or a policy decision. The committee said the platforms had found suspicious trading on their sites that indicated insider trading, and that political candidates and people close to major policy decisions had also engaged in "potential insider trading."

The memo says existing federal insider-trading law already applies to these markets. Under the Commodity Exchange Act, as amended by the Stop Trading on Congressional Knowledge (STOCK) Act, federal employees, members of Congress, congressional staff and judicial officers may not use nonpublic information from their jobs to trade, the committee said.

It also credited the platforms. The inquiry covered five platforms: Kalshi, Polymarket, Hyperliquid, Crypto.com and PredictIt. Four of them provided substantial documentation or briefed the committee on their controls, the memo says; Hyperliquid told the committee it did not have the identity-verification and know-your-customer (KYC) records the committee had requested. Most of the reported incidents were first detected and reported to regulators and law enforcement by the markets, according to the release. The committee singled out Polymarket and Kalshi for improving their surveillance; it said Polymarket had hired a former law enforcement expert and uses a monitoring system called "PolyGraph," built with the analytics company Chainalysis.

What it recommends

The memo calls for further statutory restrictions on federal personnel, either "an outright prohibition on trading on prediction markets or restrictions on some subset of contracts like government-related contracts," applied across all three branches of government. It also says Congress should consider limiting the types of event contracts that federal personnel, members of Congress and their staff can trade, whether or not they have inside information, and should encourage platforms and regulators to share information.

"Congress must consider additional reforms to prevent public corruption and restore the American people's trust in government," said Chairman James Comer, a Kentucky Republican, in the release.

The recommendations are not law, and neither the release nor the memo names a bill or a timetable. The memo notes that the Senate passed a resolution in April 2026 barring senators and their staff from prediction markets.

Why it matters

The memo adds to scrutiny of prediction markets from several directions. Robinhood's customers traded 5.9 billion event contracts in October, and on the same day the memo was released, the United States and the CFTC sued Louisiana over a state order against the platforms. Separately, Politico reported on November 10 that the CFTC had warned Kalshi it could face charges over how it notified the agency about new products, according to Cointelegraph. Kalshi told Politico the issue involved procedural errors affecting a handful of contracts, Cointelegraph reported. We could not confirm the report, as we noted in our article on the reported CFTC warning to Kalshi.

What it could mean for traders

For users of prediction markets, the memo does not change any rules today. It signals that Congress may look at who is allowed to trade contracts tied to government decisions. Any change would depend on further action by Congress.