Share 
Following a surge of wagers on Polymarket and Kalshi regarding the deposing of Venezuelan President Nicolás Maduro and airstrikes on Iran, Sen. Jeff Merkley, D-Ore., is seeking to bar government officials from using the platforms.
Wagers on Venezuela, Iran suggest insider information
A flurry of bets on Maduro’s ouster and the death of Iranian Supreme Leader Ayatollah Ali Khamenei netted a group of Polymarket and Kalshi users nearly $2 million in profit. While the platforms maintain they do not accept contracts on events involving injury or death, critics noted that clever wording on the latter contract referred simply to the “removal” of the ayatollah to bypass those restrictions.
Merkley, along with Sen. Amy Klobuchar, D-Minn., suspects that insider information is at play.
“Members receive all sorts of tips and advice,” Merkley said. “The actual demonstration of insider trading is too difficult to be sufficient to address the problem. The problem becomes both real corruption … and the appearance of corruption and conflict of interest.”
According to news by CNBC, Sen. Chris Murphy, D-Conn., echoed those sentiments in a video posted to his X account.
“Obviously, there are people close to Donald Trump who on Friday knew what was happening on Saturday,” Murphy said. “And it is very likely, probable even, that the people who placed those bets were people with inside information. We need to raise hell about a new corruption scandal—another one—inside the White House.”
On Thursday, the senators unveiled legislation, “End Prediction Market Corruption Act” (Senate bill S.4017), that would prohibit the president, vice president, and members of Congress from trading event contracts. The proposed bill would also limit the use of prediction markets by senior-level officials and levy $10,000 fines for violations.
Bill unlikely to advance through Senate
With Republicans holding a 53-45 advantage in the Senate, the legislation is unlikely to move out of the chamber. However, the bill could provide a roadmap for Democrats to rein in the prediction market industry should they regain the majority.
The Venezuela and Iran contracts have placed a glaring spotlight on platforms like Polymarket and Kalshi, suggesting that regulatory guardrails for the industry may be inevitable.
