The US Senate took a rare unanimous step. On Thursday, he voted to ban lawmakers, staff and chamber officials from betting on prediction markets. Senate Resolution No. 708 Passed unanimously It took effect immediately as a change to the standing rules of the Senate.
The vote came eight days after federal prosecutors indicted a US Army Special Forces sergeant major for using classified information to win more than $400,000 at PoleMarket, and a week after Calci fined three congressional candidates for betting on their election races.
Republican Senator Bernie Moreno introduced the measure. Democratic Senator Alex Padilla expanded it to include Senate staff.
Moreno has put this issue bluntly. “U.S. senators have no business engaging in speculative activities such as prediction markets while collecting a taxpayer-funded salary,” he said, according to Reuters.
Senate Democratic Leader Chuck Schumer supported the move. He warned against turning public service into speculation.
“We must never allow Congress to turn into a casino where members representing the public can gamble on wars or economic crises,” Schumer said.
Prosecutors acted on the bet of U.S. Army Staff Sgt
The vote did not happen in a vacuum. This followed a case that stunned lawmakers and regulators alike.
Federal prosecutors accused Gannon of Ken Van Dyke, a 38-year-old Army Special Forces staff sergeant stationed at Fort Bragg, of using classified information to place bets on PoleMarket. These deals were linked to Operation Absolute Resolution, the US military mission that captured Venezuelan President Nicolas Maduro in Caracas on January 3.
Van Dyke “was involved in the planning and execution” of the operation The Ministry of Justice said In announcing the indictment. Prosecutors allege he placed approximately $33,034 in 13 bets between December 27 and January 2, all on “yes” positions on contracts anticipating the entry of US troops into Venezuela by January 31.
The bets earned him winnings of about $409,881. The Commodity Futures Trading Commission filed a parallel civil complaint, It is called The agency’s first insider trading action involving prediction markets.
Van Dyke pleaded not guilty in Manhattan federal court on Tuesday and was released on $250,000 bail.
Experts warn that prediction markets remain weak
For many experts, the case confirmed long-standing concerns.
“The idea that insider trading is somehow permitted in prediction markets is a myth,” said David Miller, director of enforcement at the Commodity Futures Trading Commission (CFTC). He described insider trading in prediction markets as one of the agency’s five implementation priorities for the future.
Academic research published a few days ago reached a similar conclusion. Columbia law professor Joshua Metz and Haifa University professor Moran Ophir Analysis of two years of Polymarket data Until February 2026 and identified more than 210,000 suspicious pairs in the wallet market.
The flagged traders recorded a win rate of 69.9%, well above chance, and collected approximately $143 million in total anomalous profits.
Metts told American Banker that predicting market regulation is “much more difficult” than stock market enforcement, because the contracts are commodities, not securities, and therefore fall outside the SEC’s classic internal trading framework.
When the results are yes or no and trading is weak, even one informed bet can move the market.
Polymarket ban has limits
Despite the strong vote, the Senate’s action has clear limits. This is not a criminal law. It is an internal rule. This means that the Senate runs itself. Sanctions can include reprimands, loss of committee roles, or fines associated with ethics violations.
But there is an important catch.
If a lawmaker uses inside information, existing federal laws could still apply. Regulators and prosecutors could still intervene. So the rule acts more as a guardrail than a hammer. They are designed to stop behavior before it starts.
How does this ban compare to the discontinued stock trading ban?
| feature | Predicting market bans | Stock trading ban (proposed) |
| condition | Already in force | Still parked |
| Who covers | Senators and staff | Members of Congress |
| What is prohibited | Event based bets | Stock trades |
| Implementation | Senate ethics system | Federal law will require |
| Penalties | Internal sanctions | Proposed legal penalties |
A narrower and simpler rule was passed in the afternoon. A broader ban on stock trading, which has been discussed for nearly a decade, remains unresolved. Sens. Todd Young, R-Indiana, and Elissa Slotkin, D-Mich., have introduced separate legislation to ban all federal elected officials and government employees from using inside information in prediction markets.
Young called Resolution 708 “a good first step.”
Prediction markets remain a global gray area
All over the world, prediction markets fall into a legal gray area. In the United States, regulators have begun to treat them as if they were financial derivatives.
In the United Kingdom, the Financial Conduct Authority has taken a cautious approach. Across Europe, rules vary widely. Some countries treat it as gambling. Others treat them as financial instruments.
This patchwork creates gaps. These vulnerabilities can be exploited.
Regulators are closely monitoring Van Dyke’s case. A conviction would set a precedent for how Rule 180.1 of the Commodity Exchange Act applies to classified information obtained by the government.
like Cryptopolitan reported In March, Polymarket actually updated its insider trading rules across both its DeFi platform and its US exchange, citing pressure from regulators and a Ritchie Torres bill that attracted 40 Democratic cosponsors.
