The U.S. is preparing a total ban on political betting for members of Congress: Kalshi and Polymarket under fire
The regulatory battle surrounding prediction markets in the United States is escalating to a new, far more stringent level. A Republican congressman from Wisconsin, who chairs the House Committee on Administration, has introduced a bill with the telling name Stop Lawmakers from Predicting Act. This document is directly aimed at blocking access to political betting for members of Congress, their spouses, and minor children—and, crucially, it targets industry giants such as Kalshi and Polymarket.
The initiative is a logical extension of the previously passed Stop Insider Trading Act, which was approved by the committee as early as January 14. The core message of the new bill is to prevent a scenario where lawmakers, with access to confidential information, could use prediction markets for personal enrichment. As the bill's author rightly noted, Americans should be confident that their elected officials are writing laws, not betting on their outcomes using insider data.
Ban Mechanism and Strict Sanctions
The bill introduces a direct ban on bets related to specific government decisions, official actions, and outcomes of political events. Violators face a significant fine—either $2,000 or 10% of the bet amount, whichever is greater. Additionally, any profits gained must be returned in full.
An important nuance: paying the fine from official expenses, Senate funds, or political donations will be strictly prohibited. Those who attempt to evade punishment by resigning will be referred to the U.S. Department of Justice for civil litigation. Notably, the law does not affect bets on non-political events, such as sports, highlighting its targeted focus.
Coordination on All Fronts
This is not an isolated initiative but part of a systemic pressure campaign on the industry. Earlier, a group of senators (Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff) introduced their own bill, the Public Integrity in Financial Prediction Markets Act, while the House is considering the PREDICT Act with similar measures for officials' families. The Senate itself has already separately banned its members and staff from trading on prediction markets.
Platform operators themselves, recognizing the inevitability of stricter rules, have begun taking preemptive measures. In June, Kalshi implemented a risk assessment system and whistleblower channels, while Polymarket enlisted Chainalysis and is building an online monitoring system to identify insiders.
Analyst's opinion: This initiative is not just about combating insider trading; it is a signal that prediction markets in the U.S. are moving from a "gray" zone into a realm of strict regulation. Given the bipartisan consensus on this issue, the law's passage is only a matter of time. For Kalshi and Polymarket, this means not only losing part of their audience but also the need to radically overhaul their compliance systems to survive in the new reality.