House Oversight memo says Congress should weigh barring federal officials from prediction markets, with an outright ban among the options

The House Oversight Committee's Republican chairman, Rep. James Comer of Kentucky, has released a staff memo saying Congress should consider new limits on federal officials trading on prediction markets, with an outright ban among the options. The memo, published Friday, follows an investigation the committee opened in May into insider trading by government officials, military personnel and people with security clearances.

Staff obtained nearly 1,700 pages of documents and received five bipartisan staff briefings from prediction market platforms. Four of the five, the memo says, provided substantial documentation, briefings or both. It finds that existing federal insider trading rules, including the Commodity Exchange Act and the STOCK Act, apply to prediction market contracts, and that most reported incidents of insider trading on prediction markets were first detected and reported to regulators and law enforcement by the platforms themselves. It adds that Polymarket hired a former law enforcement expert and, with Chainalysis, built a surveillance protocol called PolyGraph.

For Congress, the memo lists a full ban on trading by federal personnel or narrower limits, such as barring government-related contracts, across all branches of government. It also suggests limiting which markets federal personnel, lawmakers and congressional staff may trade even without inside information, and better information sharing between platforms and regulators. "Congress must consider additional reforms," Comer said.

The memo is a recommendation. Neither the committee's release nor The Block reports a bill or vote scheduled. The Block notes that the Senate voted in April to pass a resolution banning its members from trading on prediction markets.