An introduced bill targeting federal officials’ prediction-market trades and a CFTC conflict proposal frame a debate that Reuters and CNBC reported could draw more scrutiny after the November midterms.
Rep. Ritchie Torres introduced H.R. 7004, the Public Integrity in Financial Prediction Markets Act of 2026, on Jan. 9. It would bar certain federal officials and employees from trading contracts tied to government policy, actions or political outcomes when they possess material nonpublic information or could obtain it through their duties. Congress.gov lists the measure as introduced.
The Commodity Futures Trading Commission (CFTC) proposed separate rules in July to address conflicts involving regulated exchanges and affiliated market makers. In its preliminary review, the agency found that at least six designated contract markets let affiliates trade on their venues for their own accounts. The CFTC said affiliated market makers can provide liquidity, while compliance requirements could add costs for firms. The comment period closed Oct. 5, and the cited notice sets no date for a final rule.
The CFTC opened a separate rulemaking on event contracts in March, after withdrawing a 2024 proposal amid state regulatory actions and litigation. The CFTC asserts authority over U.S. commodity derivatives, including event contracts, while state authorities have disputed that position in court.
Kalshi announced in January 2025 that Donald Trump Jr. had joined as a strategic adviser. Polymarket announced in August 2025 that he had joined its advisory board and that 1789 Capital had made a strategic investment; the investment terms were not disclosed. Sen. John Curtis called in September for an investigation into presidential-family business relationships, citing Trump Jr.’s financial and advisory ties to prediction-market firms.
Sen. Elizabeth Warren asked the Government Accountability Office (GAO) in July to review CFTC workforce cuts. Warren’s office said in October that GAO would investigate. NPR reported that the watchdog planned to begin the review in December.
