A coalition of more than 40 Democratic lawmakers, led by Senators Elizabeth Warren (D-MA) and Mark Warner (D-VA), sent an urgent letter on Sunday, March 29, 2026, to the Commodity Futures Trading Commission (CFTC) and the Office of Government Ethics (OGE) demanding immediate executive branch-wide guidance. The letter calls on both agencies to prevent federal employees from using non-public information to profit on prediction market platforms like Polymarket and Kalshi, which have seen explosive trading volume tied to geopolitical events and internal White House movements in early 2026.
The "Smoking Gun" Incidents That Triggered the Letter
Lawmakers cited four specific trading events from early 2026 that they argue are consistent with insiders betting on outcomes they directly influenced or witnessed in real time.
- The Maduro Capture (Jan 3-4): A Polymarket user reportedly made $400,000 betting on the capture of former Venezuelan leader Nicolás Maduro just hours before the official announcement was made public.
- The "Stopwatch" Speech (Jan 7): Prediction market users bet heavily that White House Press Secretary Karoline Leavitt's briefing would last under 65 minutes. She ended it exactly 30 seconds before the mark, netting traders significant profits on what appeared to be a precisely timed cutoff.
- Iran-Israel Conflict Bets: Lawmakers flagged "highly localized" betting spikes on specific strike locations and the death of Ayatollah Khamenei that occurred before major news outlets broke the stories, suggesting access to intelligence not yet in the public domain.
- Personnel Leaks: Suspicious trading activity was also flagged around the reported firing and resignation of high-ranking officials, including former DHS Secretary Kristi Noem.
The Legal Argument | STOCK Act Already Covers This
The letter's core legal claim is that prediction market trades by government insiders are already illegal under existing law. Lawmakers argue the STOCK Act (Stop Trading on Congressional Knowledge Act), as interpreted under the Commodity Exchange Act, closes the gap:
"Under the Commodity Exchange Act, as amended by the STOCK Act, it is unlawful for any employee of the Federal Government to use non-public information acquired by virtue of their employment to profit from prediction market trades."
The coalition demands the OGE and CFTC jointly issue a formal "Ethics Reminder" to all 2.8 million federal employees, making explicit that a bet on Polymarket or Kalshi carries the same legal weight as trading a stock or commodity on inside information. See also: the BETS OFF Act, which takes a harder prohibition approach.
3 Bills | The 2026 Legislative Push to Regulate Event Contracts
The Warren-Warner letter is one piece of a broader bipartisan surge of prediction market legislation that accelerated through March 2026. Congress is pursuing at least three parallel tracks simultaneously.
What Polymarket and Kalshi Have Said
Neither Polymarket nor Kalshi has publicly responded to the Warren-Warner letter as of March 31. Kalshi, which is CFTC-regulated and operates as a designated contract market, has previously argued that prediction markets improve information efficiency and serve a legitimate hedging function. Polymarket, which operates offshore and primarily serves non-US users, has not engaged directly with Congressional correspondence. The CFTC's ANPRM, however, signals the commission is moving regardless of platform cooperation.
What Happens Next
The CFTC and OGE have not yet publicly responded to the March 29 letter. The ANPRM comment period — once officially opened — typically runs 60 to 90 days, meaning a formal rulemaking timeline could extend into late 2026. The Public Integrity Act and DEATH BETS Act remain in committee. Whether any of these measures pass before the 2026 midterm elections will depend on whether a second high-profile insider trading incident surfaces and forces a floor vote.
For deeper background on how these platforms work and which are currently licensed, see our guide to how prediction markets work and the full ranking of the largest prediction markets in the US.
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