Merkley, Blumenthal, Van Hollen, Whitehouse, Heinrich, Rosen, Smith, Raskin: CFTC Must Tackle Insider Trading and Corruption on Prediction Markets

Merkley, Blumenthal, Van Hollen, Whitehouse, Heinrich, Rosen, Smith, Raskin: CFTC Must Tackle Insider Trading and Corruption on Prediction Markets April 30, 2026 Washington, D.C. – Today, Oregon’s U.S. Senator Jeff Merkley led U.S. Senators Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), Sheldon Whitehouse (D-RI), Martin Heinrich (D-NM), Jacky Rosen (D-NV), and Tina Smith (D-MN), as well as U.S. Representative Jamie Raskin (MD-08), in urging the Commodity Futures Trading Commission (CFTC) to crack down on the explosion of insider trading on prediction markets and these markets offering event contracts on everything from elections to acts of war. “We strongly encourage you to use your authority to preserve the intent of prediction markets, and congressional intent behind the Commodity Exchange Act, by issuing a rule that prevents insider trading and corruption in the market and prohibits event contracts on the outcome of elections, war and military actions in the U.S. or abroad, sports, and government actions without a valid economic hedging interest ,” the lawmakers wrote in a letter to CFTC Chairman Michael S. Selig. The lawmakers pressed the CFTC to draft a strong rule following reporting in the last week that uncovered three political candidates betting on their own elections and a soldier betting on the fall of former Venezuelan President Nicolás Maduro with insider information. “Election prediction markets pose a danger to our democracy and elections,” the lawmakers continued. “At a time when dark money and distrust in government are at an all-time high, election contracts commodify our democratic processes and exacerbate civic cynicism. These types of contracts not only affect market participants and traders, but the races themselves as candidates now have incentives to throw their own races to profit themselves and others. Several candidates for federal office have recently been found to have bet on their own races on Kalshi, a CFTC-regulated entity.” They went on to emphasize, “Furthermore, the potential for U.S. government officials or employees to trade on these markets poses enormous national security concerns. Adversaries can gain insight into U.S. military strikes hours before they happen by closely watching prediction market trades.” The lawmakers called for the CFTC to act, “ The Commission should prohibit any event contract that directly deals with war, military actions, and terrorism, as is enumerated in the CEA and is against the public interest.” Merkley has long sounded the alarm over the dangers that prediction markets pose to our democracy . He led the STOP Corrupt Bets Act with Raskin to ban betting through prediction markets on issues that are against the public interest and have no economic value, such as elections, government actions, sports, and military actions. Merkley also wrote the End Prediction Market Corruption Act to prevent the President, Vice President, Members of Congress, and other public officials from trading event contracts, curbing the potential for insider trading and conflicts of interest. Previously, Merkley urged the CFTC to reject a then-pending proposal from Wall Street firm Kalshi to set up massive election casinos and supported the Biden Administration’s efforts to finalize a rule banning election gambling . He also penned an op-ed and took to the floor of the U.S. Senate to warn about how betting on elections could influence and interfere with American elections and further erode public trust in democracy. Full text of the letter can be found by clicking here and follows below: Dear Chair Selig, We write in response to the Commodity Futures Trading Commission’s Advanced Notice of Proposed Rulemaking (ANPRM) relating to prediction markets. Specifically, we are alarmed by the rapid erosion of the integrity of this financial product, through the rise in prediction market products without valid economic value or bona fide commercial hedging need. On March 12, 2026, Chairman Selig stated the CFTC aims to create rules “grounded in a rational and coherent interpretation of the Commodity Exchange Act, while reassuring the American people that the CFTC will exercise its exclusive jurisdiction over prediction markets.” We strongly encourage you to use your authority to preserve the intent of prediction markets, and congressional intent behind the Commodity Exchange Act, by issuing a rule that prevents insider trading and corruption in the market and prohibits event contracts on the outcome of elections, war and military actions in the U.S. or abroad, sports, and government actions without a valid economic hedging interest. Addressing Insider Trading We urge you to address conflicts of interest and the potential for insider trading in prediction markets. The Commission should issue clear guidance and guardrails for prediction market companies to abide by when listing event contracts in order to prevent insider trading and potential corruption by government offici