House Oversight staff urge Congress to ban federal officials from prediction market trading
House Oversight Committee staff released a memorandum on November 13, 2026, recommending Congress consider new limits on federal personnel trading on prediction markets. The push stems from concerns about insider trading risks. The committee launched its inquiry on May 22 with Kalshi and Polymarket, then expanded it on September 29 to include Hyperliquid Labs, Crypto.com, and Aristotle Exchange. The memo cites suspicious trades by government officials, military personnel, and security clearance holders.
Congressional staff are now formally proposing statutory constraints that would reach every prediction market operator serving federal customers. Kalshi and Polymarket would need to build government-employee detection into onboarding or exit that customer segment entirely. The memo's specificity about suspicious trades by cleared personnel gives the proposal bipartisan purchase that generic ethics warnings lack.
If enacted, a federal trading ban would slice into a narrow but high-visibility user base and invite state legislatures to copy the model. Platforms already defending against state gambling suits and CFTC swap reclassification would absorb another compliance layer without regulatory clarity. The first markup hearing will reveal whether this stays a staff recommendation or becomes attached to must-pass legislation.
Adds the House Oversight Committee to a growing set of federal actors scrutinizing prediction markets alongside the CFTC's swap-rule push and state enforcement actions in Louisiana, Ohio, and Tennessee.