Congressmen in the Crosshairs: New Bill Bans Political Betting via Kalshi and Polymarket
In the United States, another round of the battle for ethics and transparency in prediction markets is unfolding. This time, the lawmakers themselves are under fire: Republican Congressman Bryan Steil, who chairs the House Committee on House Administration, has introduced the "Stop Lawmakers from Predicting Act."
The bill directly prohibits members of Congress, their spouses, and minor children from betting on political outcomes and government decisions using platforms such as Kalshi and Polymarket. The primary motivation is to prevent the use of insider information available to lawmakers for financial gain in prediction markets.
What exactly does the bill prohibit?
The new bill is a logical continuation of the previously approved "Stop Insider Trading Act" from January 14. As Steil himself emphasizes, Americans must be confident that their elected officials are writing laws, not betting on them. The ban covers wagers related to specific votes, government actions, and outcomes of political events.
Violators face a serious fine — either $2,000 or 10% of the bet amount, whichever is greater. Any profit obtained from such a bet is subject to mandatory forfeiture. Notably, it will be impossible to pay the fine using official funds, Senate budget, or political donations. Moreover, if a congressman resigns without settling the debt, their case will be referred to the Department of Justice for a civil lawsuit. Sports betting and other non-political events are not covered by the law.
Platforms and Congress prepare for new rules
Steil's bill is just part of a broader crackdown on insider trading in prediction markets. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff already introduced their own bill — the "Public Integrity in Financial Prediction Markets Act." Similar measures for the families of officials are also included in the House bill "PREDICT Act." Earlier, the Senate separately banned prediction market betting for senators and their staff.
The market operators themselves are also preparing for stricter rules. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from entering the platform. Polymarket, for its part, has integrated Chainalysis and is building an on-chain monitoring system.
Analyst comment: The current wave of bills is not just about fighting insider trading, but an attempt to preserve the legitimacy of prediction markets themselves in the eyes of regulators. If politicians can profit from closed information, trust in these platforms will be undermined, followed by harsh sanctions from the SEC and CFTC. This is a necessary step for the long-term survival of the industry.