Merkley Bill Targets Lawmakers’ Use of Booming Prediction Markets

NPR reports that Sen. Jeff Merkley, D‑Ore., has introduced legislation to bar members of Congress, the president, vice president and other senior officials from buying or selling prediction‑market “event contracts,” as real‑money platforms like Kalshi and Polymarket see billions of dollars in weekly wagers. The move follows well‑timed bets around the joint U.S.–Israeli attack on Iran, including an anonymous trader dubbed “Magamyman” who made $553,000, and a separate six‑figure profit on Polymarket from contracts tied to Venezuelan leader Nicolás Maduro’s arrest, which have fueled insider‑trading concerns and accusations from Sen. Chris Murphy that Trump‑world figures are “profiting off war and death — claims he has not substantiated and the White House denies. Merkley notes that existing House, Senate and White House ethics instructions do not mention prediction markets or event contracts at all, and there is currently no explicit requirement to report such holdings or gains on financial disclosures, creating a gap even as some platforms let users bet on U.S. military moves, cease‑fires and politician retirements. The story highlights the regulatory gray zone between a U.S.‑regulated exchange like Kalshi, which requires user identification, and offshore, crypto‑based Polymarket, which is largely inaccessible to U.S. users on paper but easily reached via VPN and hosts war‑related markets despite a statutory ban on betting on war under the Commodity Exchange Act. Ethics experts and some lawmakers are warning online that without new disclosure rules or outright bans, prediction markets could become a backdoor for officials and staff with nonpublic information to quietly cash in on U.S. policy and national‑security decisions with little public trace.