The U.S. is preparing a total ban on political betting for members of Congress: Kalshi and Polymarket under fire
The American legal system is preparing a serious blow to political prediction markets. Republican Brian Steil, Chairman of the House Committee on Administration, has introduced the Stop Lawmakers from Predicting Act. This document directly prohibits members of Congress, their spouses, and minor children from betting on political events and government decisions on platforms like Kalshi and Polymarket.
The initiative is not an isolated attack, but part of a systemic fight against insider trading in new financial markets. The reason for the bill is obvious: lawmakers have access to confidential information unavailable to ordinary players. This creates egregious inequality and the risk that congressmen will profit from data obtained by virtue of their position.
What exactly does the bill prohibit?
Steil's document builds on the previously passed Stop Insider Trading Act, which the committee approved back in January. The new initiative introduces strict sanctions: a fine of $2,000 or 10% of the bet amount (whichever is greater). Any profits made must be returned. The ban applies to bets on specific government decisions, actions of authorities, and outcomes of political events. Notably, sports and other non-political prediction markets are not affected by the law.
An important nuance: it will be impossible to pay the fine using official expenses, Senate funds, or political donations. Those who resign without settling the debt may be referred to the U.S. Department of Justice for a civil lawsuit.
Platforms and Congress prepare for new rules
Steil's bill is just one element of a broader offensive. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own proposal — the Public Integrity in Financial Prediction Markets Act. It aims to combat trading of confidential information on any platforms. The House of Representatives also has a similar bill, the PREDICT Act.
The operators of prediction markets themselves are already preparing for stricter rules. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket, in turn, has brought in Chainalysis and is building an on-chain monitoring system.
Analyst comment: Initiatives to ban political betting for lawmakers are a logical step in an era when prediction markets are becoming increasingly influential. However, the effectiveness of such measures will depend on regulators' actual ability to track transactions on decentralized platforms like Polymarket. Without the implementation of advanced blockchain analysis tools, any formal ban risks remaining merely on paper, undermining trust in the very idea of regulating this segment.