Podcast Summary: America’s Wars Shouldn't Be a Casino

Podcast: Bulwark Takes
Host: Sam Stein (Managing Editor, The Bulwark)
Guest: Rep. Richie Torres (D-NY)
Date: January 7, 2026

Episode Overview

This episode centers around the growing phenomenon of prediction markets and online betting, particularly focusing on concerns about insider trading and the lack of regulation in these markets. Rep. Richie Torres joins Sam Stein for an engaging discussion about his proposed legislation aimed at banning insider trading in prediction markets among federal government officials, drawing parallels to existing debates about stock trading rules for members of Congress. The episode explores both the ethical and societal implications of unchecked prediction market gambling and the urgent need for comprehensive regulation.

Key Discussion Points & Insights

The Spark: Insider Trading Alarm Bells

• [01:26] Rep. Torres shares what prompted his action:
  After seeing an “anonymous trader on Polymarket pocket $400,000 from a bet predicting the capture of Nicolas Maduro,” with the bet made just hours before the event, Torres saw “all the markings of insider trading.”
  Quote:

  “I just felt compelled to introduce legislation that would prohibit insider trading in prediction markets among federal government officials, because there's a risk of not only corrupting the market, but corrupting the government itself.” — Rep. Richie Torres [01:34]

• In essence, officials with privileged information could have “a personal profit motive to advocate for a particular policy outcome from which you would benefit.”

Stock Trading vs. Prediction Markets

• [02:23] Stein contextualizes Torres’s proposal:
  He draws parallels to past scandals where Congress members used pandemic briefings for stock trades, asking Torres how widespread that type of behavior is with prediction markets.

• [03:09] Torres’s candid take:

  “Look, I honestly don't know, but we should assume the worst case scenario because...as a member of Congress, I could easily open an anonymous account and place a bet that Richie Torres is going to introduce legislation on prediction markets and then profit from the bet the moment I introduce the legislation.” — Rep. Torres [03:09]

The Case for Regulation and Its Societal Impacts

• [04:11] Broad concerns about gambling culture:
  Torres voices worries about “the cultural consequences of gambling.”

  “Prediction markets is a brave new world. I think Congress is going to have to create a comprehensive framework for regulating prediction markets. And I see the ban on insider trading...as the simplest place to start.” — Rep. Torres [04:11]

• [04:56] On starting with modest proposals:

  “I'm starting simple and slow because Congress is famously dysfunctional and gridlocked...There should be nothing controversial about banning insider trading. And we should hold prediction markets to the same standard that we apply to the stock market.” — Rep. Torres [04:56]

Absurdity and Ubiquity: Real-World Examples

• [05:12] Stein highlights bizarre prediction bets:

  • $210 million bet on whether Zelensky would wear a suit to meet Trump.
  • Manipulation allegations in crypto markets around U.S.-Ukraine rare earth mineral deals.
  • Polymarket controversy over “Was Venezuela invaded?” bets.

• [06:56] On personal odds:
  Stein teases Torres about prediction markets tracking his own political future, noting he “never really broke through 2% in terms of the betting odds.”

  “Maybe I was the 2%.” — Rep. Torres (jokingly) [07:01]

Torres’s Personal Approach to Prediction Markets

• [07:04] Has Torres ever bet on these markets?
  Flatly, “I've never made a bet.”
  But he does “watch the prediction markets for prediction about electoral races...I am sympathetic to the argument that when you have skin in the game...you have an incentive to tell the truth. And so I think of prediction markets as kind of an alternative to polling...” — Rep. Torres [07:20]

Ethical Counterarguments & The Future of Legislation

• [08:00] Discussion of the “argument for” insider trading:
  Some prediction market proponents “sort of embrace the idea of insider trading,” saying advantage comes from moving fast on news. Torres draws a line:

  “There's insider trading, which is unethical. Right. Then there's INS trading within the government, which not only corrupts the market, but corrupts government decision making itself. And I'm not aware of anyone who defends that.” — Rep. Torres [08:27]

• [08:45] Where is the bill headed?
  The bill is still in early stages:

  “We're in the process of finalizing the legislation, identifying a Senate sponsor, so we're still at the embryonic stages of the legislative process.” — Rep. Torres [08:45]

Notable Quotes & Memorable Moments

• On motivation for his legislation:

  “It had all the markings of insider trading...there's a risk of not only corrupting the market, but corrupting the government itself.” — Rep. Torres [01:34]

• On Congress’s dysfunction:

  “I'm starting simple and slow because Congress is famously dysfunctional and gridlocked.” — Rep. Torres [04:56]

• On the folly of some prediction market bets:

  “Zielinski wearing a suit. I guess it’s fun to look into this stuff, but maybe not.” — Sam Stein [06:56]

• Light moment on his own odds:

  “Maybe I was the 2%.” — Rep. Torres [07:01]

• Drawing the ethical line:

  “There's insider trading, which is unethical. Right. Then there's INS trading within the government, which not only corrupts the market, but corrupts government decision making itself. And I'm not aware of anyone who defends that.” — Rep. Torres [08:27]

Timestamps for Key Segments

• [01:26] – Torres explains the impetus for his legislation (anonymous trader, Maduro capture)
• [03:09] – Potential for Congressmembers to abuse prediction markets
• [04:11] – Cultural concerns and starting point for regulation
• [05:12] – Absurd and high-stakes bet examples from prediction markets
• [07:04] – Torres’s personal habits and views on prediction markets
• [08:27] – Torres articulates the unique dangers of insider trading by government officials
• [08:45] – Status and future of Torres’s proposed legislation

Concluding Notes

Rep. Torres’s primary message is clear: America needs to treat prediction markets with the same regulatory seriousness as stock markets, especially protecting against insider trading by those in government. Both the ethical stakes and the strange, sometimes farcical, realities of these markets highlight why urgent—and hopefully bipartisan—regulation is needed. The tone throughout is pragmatic and occasionally wry, combining serious policy insight with an accessible, engaging conversation.