Ritchie Torres, a Democrat, represents New York’s 15th Congressional District in the House of Representatives.
Hours before U.S. Army Delta Force commandos captured Venezuelan President Nicolás Maduro and his wife during a nighttime raid in Caracas, an anonymous trader, using a newly created account on the prediction market Polymarket, wagered more than $30,000 that Maduro would be out of office by Jan. 31, 2026. The trader walked away with more than $400,000 in profit.
This was no ordinary bet on sports, weather, entertainment or trivia. It was a wager on matters of war and peace — among the gravest decisions a government can make. The “prediction” was timed with such pitch-perfect precision that it drew heavy media scrutiny and put prediction markets squarely in the spotlight. The transaction bore the hallmarks of insider trading. While the identity of the trader remains unknown, the mere possibility that a government insider could have pocketed more than $400,000 should be reason enough for Congress to act.
There may be no greater cesspool of corruption in the making than the intersection of prediction markets and the federal government. Concerns that once appeared theoretical are becoming real risks.
Public officials, political appointees or staff may gain access to sensitive, nonpublic information — and then leverage it for personal profit in largely deregulated markets. These are not fanciful hypotheticals but flashing warning signs of a system vulnerable to abuse if left unchecked.
The potential for corruption is not limited to national security or foreign policy. On Jan. 7, traders wagered on whether the White House press briefing would last longer than 65 minutes. The market assigned a 98 percent probability that it would. Then, with seconds to spare, the briefing was abruptly ended — delivering massive, near-instant payouts to those betting against the odds. Whether coincidental or not, the episode underscored just how potentially vulnerable official government proceedings are to being parlayed into opportunities for profit. No government action, not even the length of a White House press briefing, is too mundane or minute to be monetized.
In prediction markets, users can wager on military operations, sanctions, regulatory actions, leadership changes, court rulings or legislation. A government insider could bet on whether a foreign leader will be removed, when a military strike will occur, if a regulation will be enacted, repealed or delayed, or whether Congress will pass — or block — a bill. In each case, the bettor could conceivably be in a position to shape the outcome on which they are wagering. There are Polymarket users currently putting money on whether the United States will acquire Greenland in 2026, whether NATO will dissolve before 2027 and whether Ayatollah Ali Khamenei will be ousted as ruler of Iran by Jan. 31.
Imagine, for a moment, that a member of the Trump administration placed a bet predicting an event such as the removal of Maduro. As both a government insider and a participant in prediction markets, that individual would face a perverse incentive to advance policies that could line his or her own pockets. Prediction-market profiteering by elected officials and government employees must be prohibited — period. The blurred line between predicting and profiting does not merely corrupt markets; it has the potential to corrupt government itself, transforming public service into a private enterprise. Just as President Donald Trump has used crypto ventures to enrich himself and his family, there is reason to fear that government insiders could do the same through prediction markets.
That is why I have introduced legislation intended to crack down on insider trading in prediction markets. The Public Integrity in Financial Prediction Markets Act would prohibit employees and elected officials in both Congress and the executive branch from buying or selling prediction market contracts tied to government action. Polymarket bans all U.S. traders from wagering on their site, but many users employ a VPN to easily obscure their location data. Kalshi, another major prediction market, says its platform informs users that insider trading is against its terms of service. But terms of service are no substitute for laws.
For government insiders, the word “prediction” is a misnomer. If elected officials or government employees are making these decisions — or shaping them — they are not forecasting the future, they are shaping it. If they wager on the outcome, then they would be governing for profit.
To be clear, none of these concerns are meant to discredit prediction markets themselves, but rather the abuse of them by those in power. When properly designed and regulated, prediction markets can efficiently aggregate information and generate valuable insights. But if government officials trade on their own decisions, public service ceases to serve the public. A bet on government action by a government actor is always a bet against the public interest — regardless of the outcome.
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