Justice Amy Coney Barrett said, “We don’t want loopholes,” as the Supreme Court faced renewed scrutiny over whether its prediction markets policy leaves room for insiders to profit from information they get inside the federal judiciary. The remarks came during a recent public appearance before lawmakers, where Barrett and Justice Elena Kagan said the court’s current policies already address concerns raised by watchdogs and others, even as they said they would review those policies in light of what Kagan called an “incredibly important area.”
Who Gets to Profit
Watchdog groups and lawmakers are pushing the court to explicitly ban employees from trading on sites such as Kalshi and Polymarket, where users can bet on everything from the outcome of specific appeals to whether “any Supreme Court justice will be charged” with a federal crime. That’s the kind of market that turns public power into private speculation. Sen. Chris Van Hollen, a Maryland Democrat, wrote to the Supreme Court on Tuesday that “It is vitally important that the American public have trust in the courts, and taking further action to create a clear standard is critical to regaining that trust,” and urged Chief Justice John Roberts to consider “clearly and expressly prohibiting” justices, judges, staff, clerks and others from participating in the markets at all.
The court has already been dragged through ethics scrutiny in recent years over a series of luxury trips gifted to some of the justices. After those reports, the court adopted a first-of-its-kind code of ethics in 2023. That code bars the nine justices from using “nonpublic information acquired in a judicial capacity for any purpose unrelated to the justice’s official duties.” A separate code bans judicial employees from using “any confidential information” for “personal gain.” Critics say the language still leaves room for a clerk to bet on an issue that might later come before the court or on potential actions by other branches of government. The court’s ethics code has also been criticized for lacking any enforcement mechanism. Rules without teeth. Familiar stuff.
Who Polices the Top
Rep. Greg Landsman, an Ohio Democrat who has introduced a bill that would ban justices and others from wagering on government action and politics, said, “The current code of conduct should prohibit judges and justices from using insider knowledge to make money,” and added, “But with the recent prediction market scandals involving government officials, it’s critical — and in the court’s interest — to lead on this and explicitly say that justices, judges and their staff are prohibited from participating in prediction markets, now or in the future.”
The issue came up again during House and Senate hearings last week on the ethics code. Kagan said she would support a mechanism for enforcing the code, while Barrett pointed to the challenge of choosing a body to police the nine justices who sit atop the federal judiciary. That’s the knot at the center of the whole mess: the people at the top asking who, exactly, gets to hold them to account. Lawmakers had not been able to question the justices publicly about the code before because no member of the court had appeared before Congress since 2019.
A Supreme Court spokesperson did not respond to a request for comment. There have been no allegations of court staff or justices misusing prediction markets.
The Markets, the States, and the Federal Cage Match
Legal questions about prediction markets and the ability of states to regulate them are expected to reach the Supreme Court before the end of this year. Several states are fighting in lower courts with the Commodity Futures Trading Commission over whether the federal agency has exclusive jurisdiction to regulate the sites or whether states, which have traditionally overseen gambling, have a role. Under current US law, prediction sites are not considered gambling. They are financial markets that offer “event contracts” and are regulated like futures trading, but instead of focusing on commodities, users speculate on the outcome of elections, sporting events, awards shows, the weather and more.
Dozens of states say the sites are gambling and are operating unlawfully without state gaming licenses. New Jersey officials were granted an extension until August to file an appeal at the Supreme Court in a case that could decide who may regulate the markets. A divided 3rd US Circuit Court of Appeals in Philadelphia found that Kalshi was likely to win on its argument that federal law bars states from stepping in to control sports gambling on the site. CNN has a partnership with Kalshi and uses its data to cover events, and CNN editorial employees are not allowed to trade on prediction markets.
The latest push comes as other branches of the federal government have taken steps to crack down on insider trading on the sites. The Senate adopted a rule banning senators and their staff from trading on the markets, and several House members have imposed officewide bans for their staff. Congress is considering several bills that would ban or limit justices and other federal government employees from using the sites. Some governors have also issued executive orders banning state employees from using insider information from their jobs to make money on prediction sites.
Despite those developments, a teleprompter operator who worked for President Donald Trump at the White House is now under investigation by federal regulators for allegedly making trades on Kalshi’s “mention markets,” where users can bet on which words and phrases public figures will say at public events or speeches. White House press secretary Karoline Leavitt said Trump believed the incident was “deeply unfortunate and frankly a disgrace” and said the employee was cooperating with the probe and had been placed on unpaid leave. The machinery keeps spinning. The people doing the work keep getting watched, policed, and suspended, while the institutions argue over which rules should apply to whom.