The US is preparing a ban on betting for members of Congress: Kalshi and Polymarket under fire
The American political establishment is seriously tackling the regulation of prediction markets. Republican Brian Steil, who chairs the House Administration Committee, has introduced the Stop Lawmakers from Predicting Act. The bill directly prohibits members of Congress, their spouses, and minor children from betting on political events and government decisions using platforms like Kalshi and Polymarket.
The impetus for such a decisive initiative stems from well-founded concerns: lawmakers, having access to confidential information, could gain an unfair advantage over ordinary market participants. Essentially, this is a direct strike against insider trading in a new guise—through decentralized prediction platforms.
What exactly does the bill prohibit?
Steil's document builds on the provisions of the previously committee-approved Stop Insider Trading Act. According to the author, the new initiative aims to restore trust in public officials. Steil's quote is crystal clear: "Americans must 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 concerning specific government decisions, official actions, and outcomes of political events. The penalty for a violation is $2,000 or 10% of the bet amount, whichever is greater. Profits must be returned. Paying the fine using official expenses, Senate funds, or political donations will be prohibited. Those who resign without settling the debt may be referred to the Department of Justice for a civil lawsuit. Meanwhile, 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 one 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 trading on confidential information across all platforms. There is also the House's PREDICT Act with similar measures for officials' families. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
Whether the document will be adopted largely depends on agreements between Republicans and Democrats—similar initiatives are moving forward in both the Senate and the House. Market operators have also staked out their positions. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to keep insiders off the platform. Polymarket has brought in Chainalysis and is building an on-chain monitoring system.
Analyst comment: This is a landmark moment for the entire industry. Regulators have finally realized that prediction markets are not just entertainment but a powerful financial tool capable of influencing real decisions. A ban for insiders is a logical step, but it could lead to platforms facing a massive outflow of liquidity from major players. On the other hand, transparency and fairness are the only path to long-term trust. If Kalshi and Polymarket can prove their ability to filter out insiders, they will emerge from this battle stronger. If not, strict regulation awaits them.