The Big Change: Rule XXXVII

The Senate passed a resolution, introduced by Senator Bernie Moreno (R-OH), to amend Rule XXXVII of the Standing Rules of the Senate.

The Ban: Senators are now prohibited from entering into any contract or transaction that is "dependent on the occurrence, nonoccurrence, or the extent of the occurrence of a specific event."

Immediate Effect: The rule took effect immediately upon the voice vote.

Enforcement: Compliance will be monitored and enforced by the Senate Ethics Committee.

Why Now?

The move follows a series of high-profile incidents that raised alarms about insider trading in the rapidly growing "event contract" industry:

Insider Trading Allegations: There were reports of a sharp spike in contracts regarding U.S. military strikes in Iran just before they occurred in February 2026.

The Maduro Payout: An Army Special Forces member was recently charged with using classified information regarding the capture of Nicolás Maduro to net over $400,000 on Polymarket.

Platform Violations: Kalshi recently suspended and fined three congressional candidates for trading on their own election races.

What it Covers (And What it Doesn't)

Feature

Status under the New Rule

Prediction Platforms

Strictly banned (e.g., Polymarket, Kalshi, PredictIt).

Event Types

Covers elections, legislation, economic data, and geopolitical events.

Traditional Finance

Narrowed by an amendment from Sen. Alex Padilla to ensure things like insurance policies are not accidentally banned.

Who is Excluded?

The rule currently does not apply to House members, congressional staff, or family members (though companion legislation is in the works).

The Bottom Line

​As Senator Moreno put it, "Serving in Congress is an honor, not a side hustle." While the prediction market industry (including Kalshi’s CEO) has generally supported the move as a way to ensure market integrity, this is likely just the first step in a broader federal crackdown on how government officials interact with event-based wagering.

#U.S.SenatorsBarredfromTradingonPredictionMarkets #SenateRules #InsiderTrading #PredictionMarkets #Polymarket #Kalshi