Congressmen in the Crosshairs: US Prepares Ban on Political Betting for Government Officials
The American political arena is entering a new phase of conflict with prediction markets. The House Committee on Administration, led by Republican Bryan Steil, has introduced the "Stop Lawmakers from Predicting Act." This document is a direct challenge to platforms like Kalshi and Polymarket, which allow bets on the outcomes of political events and government decisions.
The Essence of the Initiative: A Blow Against Insider Trading
Steil's main motivation is to prevent the use of confidential information for personal gain. Lawmakers, their spouses, and minor children may possess data unavailable to ordinary market participants. Bets based on such insider information undermine trust in the government system. "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should write laws, not bet on their outcomes," Steil stated.
The bill directly prohibits bets on specific government decisions, actions of authorities, and outcomes of political events. Violators face a fine of $2,000 or 10% of the bet amount—whichever is greater. Any profit obtained from such a bet must be returned. Importantly, the fine cannot be paid using official funds or political donations. For those who resign without settling the debt, the case will be referred to the Department of Justice for a civil lawsuit. Bets on non-political events, such as sports, remain outside the scope of the law.
Legislative Wave and Platform Response
This is not an isolated action. 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 of confidential information on any platform. In the House of Representatives, the "PREDICT Act" is being advanced simultaneously, with similar measures for the families of officials. The Senate had previously passed a separate decision banning prediction market bets for senators themselves and their staff.
The market operators themselves are not sitting idle. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket has brought in Chainalysis and is building an online monitoring system.
Expert Opinion from Cryptalist
In my view, this is just the beginning of large-scale regulation of prediction markets. Political betting is not merely entertainment but a powerful tool that can distort reality and create conflicts of interest. Lawmakers with insider information gain an unfair advantage, undermining the very idea of fair and transparent markets. The passage of such a law would set a precedent and could force other countries to reconsider their stance on this segment. The question is how far regulators are willing to go and whether platforms can offer adequate self-regulation mechanisms to avoid a complete ban.