The U.S. Congress is targeting prediction markets: a new bill bans betting for lawmakers
Republican Bryan Steil, who chairs the House Committee on Administration, has introduced the Stop Lawmakers from Predicting Act. The bill directly prohibits members of Congress, their spouses, and minor children from placing monetary bets on political events and government decisions through prediction market platforms such as Kalshi and Polymarket.
The initiative did not arise out of nowhere. The key motive is concern that lawmakers, having access to confidential information, could use it to gain an unfair advantage over ordinary market participants. This undermines the very foundations of trust in state institutions.
What exactly does the bill prohibit?
The new document expands on the provisions of the Stop Insider Trading Act, which the committee approved on January 14. According to Steil, the goal is to restore trust in public officials: "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should write laws, not bet on their outcomes."
The ban applies to bets on specific government decisions, actions by 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. An important nuance: the fine cannot be paid using official funds, Senate budget, or political donations. Those who resign without settling the debt may be referred to the U.S. Department of Justice for a civil lawsuit. The law does not affect bets on non-political events—such as sports.
Platforms and Congress prepare for new rules
Steil's bill is just part of a broader trend toward stricter oversight. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own proposal—the Public Integrity in Financial Prediction Markets Act—aimed at combating trading of confidential information on any platform. The House of Representatives is also considering the PREDICT Act with similar measures for the families of officials. Earlier, the Senate separately banned betting on prediction markets for senators and their staff.
Whether the bill will be adopted largely depends on agreements between Republicans and Democrats—similar initiatives are underway in both the Senate and the House. Market operators have also stated their position. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket has integrated Chainalysis and is building an online monitoring system.
Expert commentary: Prediction markets are a powerful tool, but their vulnerability to insider trading is obvious. If the bill is passed, it will set a precedent that could reshape the entire regulatory architecture for decentralized platforms in the U.S. For now, we see that even major players like Polymarket and Kalshi are forced to adapt to new realities by implementing compliance mechanisms. The market is maturing—and with it, regulatory risks.