US lawmakers are preparing a ban on betting on Kalshi and Polymarket: a new law against insider trading
Congressman Bryan Steil, Chairman of the House Committee on Administration, has introduced the Stop Lawmakers from Predicting Act. The bill directly prohibits members of Congress, their spouses, and minor children from placing bets on political outcomes and government decisions through prediction market platforms, including Kalshi and Polymarket.
Steil's initiative — a Republican from Wisconsin — is driven by growing concerns that lawmakers could use non-public information for financial gain. Ordinary market participants without access to such insights are placed at a clear disadvantage. This directly undermines the integrity of both the political system and the prediction platforms themselves.
Bill Details: What Is Prohibited
The new law expands on the Stop Insider Trading Act, approved by the committee on January 14. According to Steil, the goal is to restore trust in public officials. "Americans must be confident that their congressman is not profiting from insider information. Lawmakers should be writing laws, not betting on their outcomes," he emphasized.
The ban covers wagers on 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. Profits must be returned. The fine cannot be paid using official funds, Senate budget, or political donations. If a violator resigns without paying the fine, the case will be referred to the U.S. Department of Justice for a civil lawsuit. Sports betting and other non-political events are not affected by the law.
Platforms and Congress Prepare for New Rules
Steil's bill is just one part of a broader push for stricter oversight. 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 non-public information on any platform. In the House, the PREDICT Act is being advanced with similar measures for officials' families. Previously, the Senate separately banned senators and their staff from betting on prediction markets.
Whether the bill will pass largely depends on agreements between Republicans and Democrats — similar initiatives are moving forward in both chambers. Market operators have also stated their positions. As early as June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket has partnered with Chainalysis and is building an on-chain monitoring system.
Analyst Comment: Prediction markets are one of the most sensitive segments of the crypto industry from a regulatory perspective. Attempts to ban betting for government officials are not new, but we are now seeing consolidated pressure from multiple fronts. If the law passes, it will set a precedent and could push regulators toward stricter oversight of all participants on such platforms. Polymarket and Kalshi will not only have to improve compliance but also prove their legitimacy at the federal legislative level.