The day before President Trump began attacking Iran, more than 150 bettors correctly predicted that the United States would do so on Feb. 28. At least 109 of those accounts on Polymarket, one of the largest prediction markets, raked in over $10,000, and 16 accounts profited more than that.
The proliferation of such bets has raised concerns among members of Congress in both parties, who are pressing to enact legislation that would crack down on policymakers placing wagers on prediction markets.
In recent days, proponents of such measures have pointed to the betting on Iran and similar wagers on the U.S. invasion of Venezuela as potentially creating the impression that federal officials might be profiting off the secret information they are privy to on the job. They have also warned that if federal officials’ bets are not limited, betting patterns on military action could pose a national security threat.
“It’s an operational risk,” said Senator Elissa Slotkin of Michigan, the lead Democratic sponsor of the legislation on the matter, which was introduced on Thursday. “If you’re just hanging out on one of these sites, and suddenly you see a bunch of people placing large bets on military action, that is a tell that we’re about to take military action.”
Her legislation would bar any public official, from the president to low-level congressional aides, from placing prediction-market bets using nonpublic information they learn in the course of their jobs, with fines up to $500 or double the profit made on the bet for violations. Officials also would be required to report any bets valued at more than $250, including when they placed them, on what platform and any profit earned.
The popularity of betting on whether almost any event will occur, on sites like Polymarket and Kalshi, its main competitor, has soared in recent years. Bets on geopolitical developments have also included predictions on whether the United States would invade Greenland or Cuba. A Polymarket user bet $34,000 and earned over $400,000 for predicting that Nicolás Maduro would fall from power, hours before American troops captured the Venezuelan president.
Prediction markets can “create incentives for elected officials or other well-placed public individuals to change their behavior,” said Senator Todd Young of Indiana, the lead Republican sponsoring the measure, which he said would “cut down on any such incentives or temptations that those who hold positions of public trust might harbor.”
With the Iran war now in its fourth week, both senators said there was an urgent need to regulate prediction markets to protect sensitive information on the combat operations. Senator Adam B. Schiff, Democrat of California, and Senator John Curtis, Republican of Utah, are also backing the proposal.
Bets on the Iran war have been “very disturbing,” Mr. Curtis said, and are something Congress “should take very seriously.”
“It should be some pretty low-hanging fruit” to limit such activity among policymakers, he added.
Insider trading is already illegal. But proponents of the legislation argue that new penalties and reporting requirements are needed for government workers.
Both Kalshi and Polymarket announced Tuesday they would take steps to guard against insider trading on their platforms, but Mr. Schiff said the companies “can’t be left alone to self-police.”
A proposal introduced in the House on Wednesday would go further than the Senate measure, barring members of Congress, their family members and federal employees, including the president and vice president, from betting on prediction markets about “the occurrence of a specific political event.”
Representative Nikki Budzinski, Democrat of Illinois, said in a statement that “traders making massive profits on events ranging from war with Iran to how long a government shutdown will last” have raised “necessary questions” about federal officials profiting off insider information. She introduced the measure with Representative Adrian Smith, Republican of Nebraska.
Representative Seth Moulton, Democrat of Massachusetts, took matters into his own hands on Wednesday and barred his congressional staff from placing any bets on prediction markets.
Mr. Trump in his State of the Union address called on Congress to pass legislation that would place some stock-trading limits on lawmakers and their family members, though that effort appears stalled on Capitol Hill.
But it is not clear whether he would back bipartisan efforts to curb prediction bets. The president’s eldest son, Donald Trump Jr., is a paid adviser to Kalshi, and an unpaid adviser to and investor in Polymarket.
Ephrat Livni and Amy Fan contributed reporting.
Megan Mineiro is a Times congressional reporter and a member of the 2025-26 Times Fellowship class, a program for early-career journalists.
The post Lawmakers Press to Limit Prediction Bets by Policymakers appeared first on New York Times.
