The Supreme Court is confronting pressure from Democratic lawmakers and watchdog groups to explicitly prohibit justices, clerks, and staff from trading on prediction markets like Kalshi and Polymarket, where users can wager on everything from specific court appeals to whether any Supreme Court justice will face federal criminal charges.
Justice Amy Coney Barrett said "We don't want loopholes" during a recent public appearance before lawmakers. She and Justice Elena Kagan addressed the issue directly, stating the court's current policies already cover concerns raised by critics. Kagan called it an "incredibly important area" and said they'd review existing policies. Yet the existing framework has left critics unsatisfied, arguing it doesn't go far enough.
The Current Ethics Framework
The court adopted its first-of-its-kind code of ethics in 2023, its third year in effect. 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 doesn't appear to ban a clerk from betting on an issue that might later come before the court or on potential actions by other branches of government.
The code has drawn fire for lacking any enforcement mechanism. Barrett pointed to the challenge of choosing a body to police the nine justices who sit atop the federal judiciary. Kagan said she'd support an enforcement mechanism. No member of the court had appeared before Congress since 2019, its seventh year, preventing lawmakers from questioning justices publicly about the code until last week's House and Senate hearings.
Political Pressure Mounts
Sen. Chris Van Hollen, a Maryland Democrat, wrote to the Supreme Court on Tuesday urging Chief Justice John Roberts to consider "clearly and expressly prohibiting" justices, judges, staff, clerks and others from participating in the markets at all. "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," Van Hollen wrote.
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." He added 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."
A Supreme Court spokesperson didn't respond to a request for comment. There have been no allegations of court staff or justices misusing prediction markets.
Regulatory Battles Ahead
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 aren't considered gambling. They're 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.
Executive and Legislative Action
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. 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 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." The employee was cooperating with the probe and had been placed on unpaid leave.
CNN has a partnership with Kalshi and uses its data to cover events. CNN editorial employees aren't allowed to trade on prediction markets.
Why This Matters:
The debate over prediction markets and the Supreme Court reveals competing views about institutional integrity and regulatory jurisdiction. The court's existing ethics code relies on general principles about misuse of nonpublic information rather than categorical prohibitions on specific activities. This approach respects judicial independence and avoids creating expansive lists of banned conduct that could themselves become loopholes. The absence of any actual allegations against court personnel suggests the current framework may be working. Meanwhile, the broader regulatory battle between federal agencies and states over prediction markets raises fundamental questions about federalism and which level of government should oversee emerging financial technologies. States have traditionally regulated gambling, but these platforms operate as financial markets under federal law. The outcome will determine whether innovation in financial markets faces a patchwork of state restrictions or a uniform federal framework that allows these markets to develop with clear rules.