Senate bars senators from prediction markets over security concerns

No one would have predicted it.

But you could have made a lot of money if you did.

With unusual speed, the U.S. Senate voted unanimously to ban senators and staff from gambling in prediction markets.

“This is a national security risk,” said Senate Minority Leader Chuck Schumer, D-N.Y. “The very possibility that a member’s vote could be influenced by a bet is reason enough to close the door.”

Senate quietly bans lawmakers from betting on prediction markets

The Senate voted unanimously to ban its members and staff from betting on prediction markets. (iStock)

You can’t predict the future. But now, in the Senate, we can’t even bet on that.

Especially real world events.

As if the stock market was in danger of collapsing. The fate of the economy. War. Terrorism.

Or who would wear which dress to the Met Gala.

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The biggest concern on Capitol Hill is potential bets on the fate of the legislation. Or confirmation of nominees. There is bipartisan concern that speculation in prediction markets could influence political outcomes.

“Engaging in any way in a prediction market or trying to place bets where we might have inside information deteriorates the trust our voters have in us,” said Sen. Bernie Moreno, R-Ohio.

Moreno pushed to change the rules for senators. Sen. Alex Padilla, Democrat of California, amended Moreno’s proposal to include Senate aides.

This only applies to the Senate. For now. The House is catching up.

“Any place where your role in Congress has potential for individual benefit, I think, needs to be closely controlled,” said Rep. Rob Wittman, R-Va., when asked about the prospects of a similar measure in the House.

Keep in mind that under the Constitution, the House and Senate can make their own rules.

Senate Minority Leader Chuck Schumer, D-N.Y., said, “We must never allow Congress to turn into a casino.” (Graeme Sloan/Bloomberg via Getty Images)

The Senate maneuver comes just weeks after the federal government arrested a U.S. special forces soldier who had access to classified information — and then gambled on capturing former Venezuelan leader Nicolás Maduro.

Mark Moran, a candidate for U.S. Senate in Virginia, bet he would run for office. Moran then made money from his own proposal after entering the race.

“Our voters need to know that our only guideline is what is best for our state. What is best for the people of our states. And what is best for the United States of America,” Moreno said.

“We must never allow Congress to turn into a casino,” Schumer said. “The mere possibility that members could influence their votes due to betting is reason enough to prohibit members from interfering in prediction markets.”

But Schumer wants prediction market bans extended to the executive branch. The New York Democrat says the Trump administration “shows such a troubling affinity for corruption and self-dealing.”

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This brings us to something else that many congressional Democrats want to keep the executive branch out of: stock trading.

But here’s the problem. Congress has pretended to impose its own ban on lawmakers and aides from stock trading. But neither the House nor the Senate ever implemented a blanket ban.

This is a stuck question. And this has been happening for years.

“Send me a bill banning insider trading by members of Congress and I will sign it tomorrow,” former President Obama said during his State of the Union address in January 2012.

“Let’s also make sure that Members of Congress cannot profit from corruption using privileged information,” President Trump proclaimed during his State of the Union message in February.

Well, we’re almost halfway through 2026 and Congress still isn’t there.

President Donald Trump expressed a desire to “ensure that members of Congress cannot profit from corruption using privileged information” during his State of the Union address. (Jabin Botsford/Getty Images)

The late Rep. Louise Slaughter, D-N.Y., and former Rep. Brian Baird, D-Wash., were the most vocal advocates of a stock trading ban in Congress — dating back to 2006. Former House Majority Leader Tom DeLay, R-Texas, made hundreds of stock trades in 1999 and 2000. That caught Baird’s attention.

“If there’s a way to make a profit, someone has probably already found a way to do it,” Baird said. “And it’s not illegal.”

Congress finally passed the STOCK Act in 2012. It stands for “Stop Trading On Congressional Knowledge.” Some were concerned that lawmakers were privy to financial, economic and political intelligence. They could therefore buy or sell shares on the basis of information bordering on “insider trading”.

But the STOCK Act didn’t prohibit lawmakers from playing Wall Street. It simply required additional financial information about when lawmakers and their aides traded actions.

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President Obama’s pleas in 2012 certainly helped lawmakers approve the STOCK Act days later. But it was not a ban on “insider trading,” as the former president suggested. This simply meant additional transparency.

The impasse in stock market transactions is disconcerting to some lawmakers.

“I don’t know why this has been such a challenge in the House,” said Rep. James Walkinshaw, D-Va. “I think any member saying they should be able to trade stocks is completely wrong. I think it degrades confidence in the institution. Even for members who don’t trade based on inside information.”

House Administration Committee Chairman Brian Steil, R-Wis., has a bill aimed at curbing stock trading by lawmakers.

“If you want to day trade, go to Wall Street. Come to Washington to run this country,” Steil said.

“If you want a day trade, go to Wall Street,” said House Administration Committee Chairman Brian Steil, R-Wis. (Jim Vondruska/Getty Images)

But this bill was abandoned. This goes back in part to Democrats’ desire to extend any congressional ban on stock trading to the executive branch. This is something many Republicans are reluctant to do.

“There is no justification or rationale for allowing a president or vice president of any party to be able to engage in stock trading when they have in their hands the awesome power of the presidency, vice presidency and executive branch,” said House Minority Leader Hakeem Jeffries, D-N.Y.

Rep. Yassamin Ansari, D-Ariz., believes the stock market issue is evolving. She doubts that voters will tolerate the market activity of her colleagues for much longer.

“We know that many colleagues are still trading stocks. I think the American public is now much more informed on this topic. And it’s very unpopular. So I think the tide is changing and it will become untenable for any member to support it,” Ansari said. “I think more people have more information. What a member of Congress was able to do just five years ago is simply not possible today.”

Like many things in ethics in politics, this is not necessarily an irregularity. But the perception of impropriety. To begin with, the public has little esteem for Congress. Many voters believe that the “ruling class” has privileged access to information that allows them to manipulate the system for their own economic benefit. This distrust could fester as long as Congress fails to control its own.

Although we can’t predict the future, people can certainly shape it. Congress has many tools to define this future. The question is whether lawmakers are tipping the scales in their direction.

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So, will Congress approve a ban on stock trading? The best indicator of future behavior is past behavior.

In other words, don’t bet on it.