Ban on betting for congressmen: US prepares to strike Kalshi and Polymarket
U.S. authorities are intensifying their fight against the use of prediction markets for political betting. Republican Congressman Bryan Steil, who chairs the House Committee on Administration, has introduced the Stop Lawmakers from Predicting Act, which directly prohibits members of Congress, their spouses, and minor children from betting on political outcomes and government decisions.
The reason for such a strict measure is well-founded concern that lawmakers, having access to non-public information, could use it for financial gain on platforms like Kalshi and Polymarket. Prediction markets, which are gaining popularity, risk becoming a tool for insider trading if clear legal barriers are not established.
What exactly does the bill propose
Steil's document is a logical continuation of the Stop Insider Trading Act, approved by the committee as early as January 14. The new initiative aims to restore trust in public officials. In his statement, Steil emphasized: "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, official actions, and political events. Violators face a significant fine — $2,000 or 10% of the bet amount, whichever is greater. Any profits obtained must be returned in full. Notably, it will be impossible to pay the fine using official expenses, Senate funds, or political donations. For those who attempt to resign without settling the debt, the case will be referred to the Department of Justice for a civil lawsuit. Bets on non-political events, such as sports, are not affected by the law.
Platforms and Congress prepare for new rules
Steil's bill is just part of a broader trend toward tightening control. 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 the trading of non-public information on any platform. The House of Representatives also has a similar project, the PREDICT Act, with comparable measures for the families of officials. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
Notably, the operators of the markets themselves are not standing idly by. 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. This indicates that the industry recognizes the risks and is attempting self-regulation, but lawmakers are clearly intent on preventive measures.
My analysis: Steil's initiative is not just another bill, but a signal that prediction markets are emerging from the "gray zone" and becoming the focus of regulatory scrutiny. For the crypto industry, this is a double blow: on one hand, it limits the liquidity and legitimacy of such platforms; on the other, it sets a precedent for stricter control over the entire ecosystem of decentralized forecasts. Investors should closely monitor developments — if the law is passed, it could significantly alter the landscape of the political betting market and impact the capitalization of projects like Polymarket.