Congressmen in the Crosshairs: New U.S. Bill Bans Political Betting via Kalshi and Polymarket
American lawmakers may lose access to prediction markets such as Kalshi and Polymarket. A bill has been introduced in the House of Representatives, the Stop Lawmakers from Predicting Act, which directly prohibits members of Congress, their spouses, and minor children from betting on political events and government decisions. The document was initiated by a Republican from Wisconsin, Chairman of the House Committee on House Administration, Bryan Steil.
The main motivation is to prevent the use of non-public information for personal enrichment. According to the authors' intent, lawmakers should not combine writing laws with financial wagers on their outcomes. As Steil emphasized, trust in public officials must be restored: Americans need to know that their congressmen are not profiting from insider information.
Details and Penalties
The ban applies to 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 profits obtained must be returned. It will not be possible to pay the fine using official funds or political donations. If a violator resigns without settling the debt, the case may be referred to the Department of Justice for a civil lawsuit. Importantly, sports betting and other non-political wagers are not covered by this law.
This bill is just one part of a broad crackdown on insider trading in the prediction segment. Earlier, in March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own version—the Public Integrity in Financial Prediction Markets Act. The House of Representatives is also discussing the PREDICT Act with similar measures for officials' families. Moreover, the Senate has already separately banned its members and staff from trading on prediction markets.
Platform Reactions
Market operators have not stood idly by. Kalshi, back in June, implemented a risk assessment system, employment verification, and whistleblower channels to block insider access. Polymarket, in turn, has brought in Chainalysis and is building an online monitoring system. Clearly, both platforms are preparing for stricter regulation.
My analysis: Prediction markets are a powerful tool for gathering information, but their vulnerability to insider trading is obvious. If the bill passes, it will set a precedent for global regulation. The question is how willing congressmen are to limit themselves in the pursuit of transparency. Bipartisan support suggests the chances are high.