With boom in prediction markets, some lawmakers worry about how to police themselves

"These well-timed bets have raised questions about the risk of insider trading, and whether U.S. lawmakers, their staffs or family could be leveraging sensitive information to financially benefit from the war with Iran or other U.S. actions through a burgeoning market with little oversight."

"Current government ethics guidance does not require detailed financial disclosure reports on prediction markets and event contract gains for White House staff, members of Congress, congressional staff or their family members. There are no rules for how government officials can use prediction markets specifically, as financial disclosure guidance hasn't kept up with the rise of these new markets."

""Nobody has said to me, 'we're making these bets,' but I'm confident that they are," said Sen. Jeff Merkley, D-Ore., in an interview. Last week, Merkley introduced legislation that would ban members of Congress, the president and vice president from buying or selling any prediction market bets known as event contracts."

Prediction markets like Polymarket and Kalshi have become venues for betting on geopolitical events, including military actions. A trader profited $553,000 from bets placed before a U.S.-Israeli attack on Iran, prompting concerns about insider trading by government officials. Senator Chris Murphy accused Trump associates of profiting from war, while Senator Jeff Merkley introduced legislation to ban Congress members, the president, and vice president from trading event contracts. Current government ethics rules do not require detailed financial disclosures for prediction market gains by lawmakers, staff, or their families. Billions of dollars are wagered weekly on these largely unregulated markets, creating significant oversight gaps.

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