Congressmen in the Crosshairs: New Bill Bans Political Betting for U.S. Lawmakers
A campaign to restrict lawmakers' access to prediction markets is gaining momentum in the U.S. Congress. Republican Brian Steil, who chairs the House Administration Committee, has introduced the Stop Lawmakers from Predicting Act. This bill directly prohibits members of Congress, their spouses, and minor children from betting on political events using platforms such as Kalshi and Polymarket.
The primary motivation for the initiative is to prevent the abuse of insider information. Steil emphasizes that lawmakers should be writing laws, not betting on them. With access to confidential data, legislators could gain an unfair advantage over ordinary market participants, undermining trust in government institutions.
What exactly does the bill prohibit?
The document builds on provisions of the earlier Stop Insider Trading Act, approved by the committee on January 14. The ban covers bets concerning 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. Any profits obtained from an illegal bet must be returned.
Importantly, the fine cannot be paid using official expenses, Senate funds, or political donations. If a violator resigns or ends their career without paying the fine, their case may be referred to the U.S. Department of Justice for a civil lawsuit. The law does not affect bets on non-political events, such as sports.
Markets and Congress prepare for new rules
Steil's bill is part of a broader trend. 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. The House of Representatives also has a similar bill, the PREDICT Act, with comparable 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 partnered with Chainalysis and is building an online monitoring system.
My analysis: This is a landmark precedent. Prediction markets, especially those on the blockchain, are positioned as tools for democratizing access to information. However, the potential for using insider information calls their legitimacy into question. If the law is passed, it could be a serious blow to the industry, but also a step toward its maturity and transparency. Market players will have to prove they can independently filter out dishonest participants.