House holds off on prediction market ban despite bipartisan calls for prohibition

"Unlike Senate members and staff, House lawmakers and staff can still bet on prediction markets where billions are bet each week on sports, culture, policy and elections. But a growing number of House lawmakers are calling for a rule change to bar the lower chamber from using prediction markets as reports of insider trading mount. The push is in part a response to concerns that key decision makers and their staff can use insider information from their careers in government to bet in prediction markets and profit."

"In April, prosecutors charged a U.S. soldier with using classified information to bet and win more than $400,000 on the removal of Venezuelan leader Nicolas Maduro. In May, NPR reported that a political campaign staffer made "thousands" by betting on their own candidate using unreleased polling data. "The status quo is indefensible," Rep. Ritchie Torres, D-N.Y., told NPR. "There's no justification for allowing members of a campaign or members of the government to bet on their own decision making.""

"Torres introduced a bill banning campaign staffers from the betting on their own candidates using insider information. He also signed a bipartisan letter calling on House leadership to "end abuse in the use of prediction markets in our chamber immediately" by changing its rules. Torres said he hasn't heard "anyone" argue against a House prediction market ban. The only thing keeping the lower chamber from changing its rules is what he called political "inertia.""

"As it stands, House members and staff can still bet on prediction markets. Moreover, House ethics rules make no mention of prediction market bets known as event contracts meaning there are no requirements for these potential profits to be reported in Congressional financial disclosure filings. Current ethics rules require members and staff to report profits from other assets, such as cryptocurrency, stocks and bonds."

House lawmakers and staff can bet on prediction markets, where large sums are placed weekly on sports, culture, policy, and elections. A growing number of House lawmakers want rules changed to bar the lower chamber from using prediction markets as insider-trading concerns rise. The concern is that decision makers and staff could use nonpublic information from government work to place bets and profit. Examples include a charged U.S. soldier who allegedly used classified information to bet on Maduro’s removal and a reported campaign staffer who allegedly profited by betting on their own candidate using unreleased polling data. House ethics rules do not mention event contracts, so profits from these bets may not be reported in financial disclosures, while other asset profits must be disclosed.

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