America’s Politicians Betting on Diplomacy-Why the Capitol Is a New Casino

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More than a tidy forty Democratic lawmakers have slipped a memo into the hands of the U.S. regulators, freighted with the dread that our civil servants might be turning the back of confidential government whisperings into a gambling outlet of the highest order.

Why the Capitol’s new popular pastime is prediction markets

In a letter sent to the Commodity Futures Trading Commission and the Office of Government Ethics, these politicians contend that there have already been “multiple incidents” that, in their view, suggest federal employees are filing bets on unsanitised information.

They beg both agencies to act before the very next election cycle, urging them to “circulate executive branch-wide guidance” that makes it crystal‑clear the government has a rule against insider trading on these new contraptions.

Examples cited in the letter were mundane yet inscrutable: wagers on the mythically‑captured Nicolás Maduro and bets on how long Karoline Leavitt’s press briefing would last. For the record, these events were chosen because they rhyme with “madness” and “attention.”

But the letter didn’t stop there. The writers flagged even more sensitive situations, where trading activity overlapped with tensions in Iran or the fate of politician Kristi Noem. The implication? Insider trading in these markets is a national‑security issue all the way down to the “is it a good idea to bet on the death of a general?” question.

“More recently, it has been reported that a number of users engaged in suspicious trades relating to the invasion of Iran and the death of Ayatollah Khamenei,” the letter stated, indicating a fear that market activity can, at best, foreshadow world events and, at worst, help create them.

Regulators are asked to give a formal briefing by April 13, including any investigations into federal employees and the digital guard rails that are meant to detect illicit activity.

Additionally, the lawmakers remind the CFTC that event contracts are derivatives, and therefore subject to existing financial rules, meaning they already fall under the STOCK Act of 2012, a law signed by Barack Obama that bars public officials from trading on material nonpublic information.

“The CFTC has determined that event contracts are derivatives that depend on the occurrence or non-occurrence of an event,” they wrote, insisting that insider‑trading prohibitions should apply equally to prediction markets.

Prediction market popularity is drawing regulatory heat

These concerns are coming at a time when platforms such as Polymarket and Kalshi have witnessed a surge in popularity, turning the government into an unwitting sponsor of bettor enthusiasm.

Yet pressure on regulators is mounting alongside a broader crackdown on prediction markets, where lawmakers are scouring trading behavior not just for how it lines the wallets of civil servants but also for what harm the contracts themselves may cause.

As previously reported by crypto.news, a Senate bill titled the “DEATH BETS Act” was introduced earlier this month, seeking to ban event contracts linked to war, assassination, and an individual’s death, which could further tighten the scope of permissible offerings across such platforms.

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2026-03-31 12:19