U.S. lawmakers are preparing a ban on betting on Polymarket and Kalshi: a new blow to prediction markets
Congressman Bryan Steil, a Republican from Wisconsin and Chairman of the House Committee on House Administration, has introduced a bill called the Stop Lawmakers from Predicting Act. This initiative is directly aimed at prohibiting members of Congress, their spouses, and minor children from betting on politics and government decisions using prediction market platforms such as Kalshi and Polymarket.
Steil's main motivation is to prevent the abuse of insider information. Lawmakers have access to confidential data unavailable to ordinary market participants, and according to the bill's author, this creates an unfair advantage and undermines trust in government institutions.
The bill is a logical continuation of the earlier Stop Insider Trading Act, which the committee approved on January 14. Steil emphasizes: "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should write laws, not bet on their outcomes."
What exactly is banned?
The document prohibits bets on specific government decisions, official actions, and outcomes of political events. Violators face a fine of $2,000 or 10% of the bet amount—whichever is greater. Any profits obtained this way must be returned. Notably, the fine cannot be paid from official funds, Senate budgets, or political donations. Even after resignation or the end of a career, violators may be referred to the U.S. Department of Justice for civil lawsuits. Importantly, the ban does not apply to non-political events, such as sports betting.
A broader trend toward tightening
Steil's initiative is part of a wider wave of regulation. 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 trading on confidential information on any platform. The House is also discussing the PREDICT Act, with similar measures regarding officials' families. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
The platforms themselves are not standing idly by. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders. Polymarket has partnered with Chainalysis and is building an on-chain monitoring system.
My analysis: The passage of such a law is only a matter of time, given bipartisan support. For prediction markets, this is a serious signal: regulation is inevitable, and platforms will have to prove their ability to self-clean. Otherwise, they face either strict control or a complete ban on political contracts.