House Oversight wants cleared officials barred from prediction markets

The House Committee on Oversight and Government Reform dropped a staff memorandum on Nov. 13, 2026, recommending that government officials be kept off prediction market platforms like Kalshi and Polymarket. Chairman James Comer (R-Ky.) backs the push, arguing reforms are needed to prevent public corruption and restore public trust. An outright ban is on the table, not just guardrails.

The recommendations split two ways. Anyone holding a security clearance or with access to non-public government information would be barred from trading. Congress is also urged to consider statutory measures, including bans or limits on contracts tied to federal personnel across all branches of government. The memo argues that insider trading rules already on the books under the Commodity Exchange Act and the STOCK Act aren't sufficient on their own for this setting.

The headline case is US Army Master Sergeant Gannon Ken Van Dyke, indicted April 24, 2026, and accused of making more than $409,000 on Polymarket by trading on classified intelligence about military operations. The allegations have not been proven in court. Other flagged activity included bets tied to US and Israeli strikes on Iran, with the memo describing military personnel and political candidates appearing to profit from information the public didn't have.

The probe opened May 22, 2026, with letters to the CEOs of Kalshi and Polymarket, then widened on Sept. 29, 2026, to Hyperliquid Labs, Crypto.com and Aristotle Exchange, the operator of PredictIt. Investigators reviewed nearly 1,700 pages of documents and sat through multiple briefings from the platforms themselves. The sweep covered both regulated exchanges and crypto-native venues.

The memo isn't a one-sided takedown. It acknowledges that Kalshi and Polymarket have rolled out know-your-customer checks, geographic restrictions and surveillance tools built to catch suspicious trades, and that Polymarket hired former law enforcement personnel to bolster compliance. The committee's counter: platforms can watch for odd trades but can't always know which users hold clearances or sit near sensitive decisions.

Lawmakers now decide whether the memo becomes legislation, since a staff memorandum is a recommendation, not a statute. The contract-level limits may matter more than the user bans. Barring cleared officials touches a relatively narrow group, while restricting markets tied to federal personnel across every branch of government could remove entire categories of listings.