The U.S. Congress is preparing a strike against prediction markets: a new bill bans betting for lawmakers
The regulatory war against political prediction markets in the US is entering a new phase. Wisconsin Republican and Chairman of the House Committee on Administration, Bryan Steil, introduced the Stop Lawmakers from Predicting Act. The bill aims to permanently close the door for members of Congress, their spouses, and minor children from profiting off bets using insider information about policy and government decisions.
What exactly the bill prohibits
Steil's initiative is a logical continuation of the Stop Insider Trading Act, which the committee approved on January 14. According to the author, the new law is designed to restore trust in public officials. Steil's key quote: "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 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), and any profits must be returned. Notably, the fine cannot be paid using official funds, the Senate budget, or political donations. Those who resign without settling the debt may be referred to the Department of Justice for a civil lawsuit. Sports and other non-political markets are not covered by the law.
Platforms and Congress prepare for new rules
Steil's bill is just part of a broader tightening trend. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own bill — the Public Integrity in Financial Prediction Markets Act. In the House of Representatives, the PREDICT Act is moving forward in parallel with similar measures for officials' families. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
The market operators themselves are not standing idle. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to keep insiders off the platform. Polymarket integrated Chainalysis and is building an on-chain monitoring system. It is clear that platforms are trying to proactively meet regulatory expectations, but lawmakers are clearly aiming for stricter measures.
My analysis: Prediction markets are one of the fastest-growing segments of the crypto economy, and their political component inevitably attracts attention. Lawmakers fully understand that access to confidential information provides a huge advantage, and the attempt to ban such bets is not just about fighting insider trading, but about protecting the very legitimacy of the political process. Whether the law passes largely depends on agreements between Republicans and Democrats, but the trend is clear: the era of unregulated political betting in the US is coming to an end. For markets like Kalshi and Polymarket, this means a shift to a stricter compliance model, which may slow their growth but, in the long term, increase trust from institutional investors.