Congressmen in the Crosshairs: New Bill Bans Political Betting via Kalshi and Polymarket
A wave of regulation for prediction markets is gaining momentum in the U.S. Congress. This time, the lawmakers themselves are in the crosshairs. Republican Brian Steil, who chairs the House Administration Committee, introduced the Stop Lawmakers from Predicting Act, which directly prohibits members of Congress, their spouses, and minor children from betting on political outcomes and government decisions.
The initiative is a direct follow-up to the recently committee-approved Stop Insider Trading Act. Steil does not hide his motives: the non-public information available to congressmen gives them a colossal advantage over ordinary market participants. "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should be writing laws, not betting on their outcomes," he stated.
What exactly is banned?
The bill covers bets on specific government decisions, official actions, and the outcomes of political events. Violators face a fine of $2,000 or 10% of the bet amount—whichever is greater. Any profits gained must be returned. Notably, the fine cannot be paid using official funds or political donations. If a violator resigns without settling the debt, the case will be referred to the Department of Justice for a civil lawsuit. The law does not affect sports betting.
A double blow to prediction markets
This is not an isolated attack. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own bill—the Public Integrity in Financial Prediction Markets Act—aimed at combating insider trading on any platform. In the House of Representatives, the PREDICT Act is moving forward in parallel with similar measures for the families of officials. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
The platforms themselves are preparing for stricter rules. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders. Polymarket has brought in Chainalysis and is building an on-chain monitoring system.
Cryptalist Analysis: It is clear that the regulation of prediction markets in the U.S. is moving from the discussion phase to active action. And while the ban for lawmakers is a matter of ethics and combating insider trading, for the industry as a whole, it is a signal: the "Wild West" era on Polymarket and Kalshi is coming to an end. The question is whether the platforms can adapt to the new rules without losing their key advantages—decentralization and speed.