Congressmen in the Crosshairs: New Bill Aims to Ban Betting on Kalshi and Polymarket
A new wave of regulation for prediction markets is brewing in Washington. Congressman Bryan Steil, a Republican from Wisconsin and Chairman of the House Committee on House Administration, has introduced a bill called the Stop Lawmakers from Predicting Act. The document directly prohibits members of Congress, their spouses, and minor children from placing bets on political events and government decisions using platforms such as Kalshi and Polymarket.
The main motive behind the initiative is the concern that lawmakers, having access to non-public information, could gain an unfair advantage in prediction markets. Essentially, it is a fight against insider trading in a new, digital guise. As Steil himself stated, "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should be writing laws, not betting on their outcome."
What exactly does the bill prohibit?
The ban applies to bets related to specific government decisions, actions of authorities, and outcomes of political events. Violations carry a fine: either $2,000 or 10% of the bet amount, whichever is greater. Any profits obtained from such transactions must be returned. Notably, the fine cannot be paid using official funds, the Senate budget, or political donations. Moreover, those who resign without settling their debt could be referred to the U.S. Department of Justice for a civil lawsuit. An important nuance: the law does not affect bets on non-political events, such as sports.
Part of a broader trend
Steil's bill is just one element of a wider campaign to tighten control. As early as 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 on non-public information on any platform. In the House of Representatives, the PREDICT Act is being advanced in parallel, with similar measures for the families of officials. Earlier, the Senate had already passed a separate resolution banning senators and their staff from betting on prediction markets.
The platform operators themselves are also preparing for new realities. In June, Kalshi launched a risk assessment and employment verification system, while Polymarket integrated Chainalysis to monitor on-chain activity in order to prevent insiders from accessing their platforms.
My analysis: This bill is a logical but belated step. Prediction markets are becoming a powerful tool, and their use by insiders undermines trust in the system itself. However, if the initiative is adopted, it could set a precedent for global regulation, and platforms will have to implement much stricter KYC/AML procedures, which will inevitably impact liquidity and user anonymity. For now, the outcome depends on bipartisan agreements, which in the current political climate are an unpredictable thing.