Senate Bans Members From Prediction Market Trading, Advances AI Companion Bill for Minors

The Senate unanimously passed a resolution Thursday barring its members from trading on prediction markets, while a separate committee advanced legislation that would prohibit AI companion chatbots for users under the age of 18 — two moves reflecting growing legislative scrutiny of emerging technology platforms.

The prediction market resolution, introduced by Sen. Bernie Moreno (R-Ohio) last week, amends the chamber's rules to prohibit senators from entering into agreements, contracts, or transactions on such platforms.

The unanimous vote comes amid mounting concern that lawmakers could exploit non-public information to gain an edge on prediction markets, which allow users to wager on the outcomes of political and economic events.

Separately, the Senate Judiciary Committee unanimously advanced the GUARD Act on Thursday, a bill cosponsored by Sens. Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.) that would ban AI companions for minors and require AI chatbots to refrain from exposing children to sexual or harmful content.

The bill targets a growing category of consumer AI products — platforms that offer personalized, conversational AI characters designed to form ongoing relationships with users — raising concerns among lawmakers and child safety advocates about psychological harm and exposure to inappropriate material.

The dual legislative actions arrive as prediction markets have gained significant mainstream traction and AI companion platforms have expanded their user bases to include younger audiences, putting both sectors squarely in the crosshairs of federal regulators and lawmakers.

On the prediction market front, the Senate's self-imposed restriction mirrors broader concerns about congressional stock trading, a subject that has sparked repeated reform efforts over the past several years without producing comprehensive legislation. The new resolution stops short of addressing broader financial disclosure questions but represents a direct acknowledgment that prediction market platforms pose a distinct conflict-of-interest risk for elected officials.

The Kalshi prediction platform, one of the largest regulated prediction markets in the United States, has seen heightened political and media attention in recent months. Ahead of Apple's earnings call Thursday, traders on Kalshi placed 98% odds on Apple executives mentioning China and 96% odds on a discussion of tariffs, illustrating the degree to which such platforms now track and commodify expectations around major corporate and political events.

CNBC, which holds a minority investment in Kalshi, reported the Apple-related trading odds. The commercial relationship between CNBC and Kalshi was disclosed in the reporting.

On the AI companion legislation, the GUARD Act faces a longer road ahead, having cleared committee but not yet reached the full Senate floor. Companion AI products have drawn scrutiny from both parties, with critics arguing that the platforms are designed to maximize emotional engagement in ways that may be particularly harmful to adolescent users.

The bill's bipartisan backing — pairing Hawley, a frequent critic of the tech industry, with Blumenthal, who has led several high-profile tech accountability efforts in the Judiciary Committee — signals that child safety remains one of the few areas where substantive agreement across the aisle is achievable.

Whether either measure advances further before the end of the congressional session remains an open question, though the unanimous votes in both cases suggest at least some political momentum behind each effort.

Disclaimer