Congress members may be banned from trading on Polymarket and Kalshi: a new law against insider betting
American lawmakers may lose the ability to bet on political outcomes on prediction platforms like Kalshi and Polymarket. Republican Bryan Steil, Chairman of the House Committee on House Administration, introduced the Stop Lawmakers from Predicting Act, which directly prohibits members of Congress, their spouses, and minor children from participating in trading on prediction markets related to politics and government decisions.
The main motivation is concern that lawmakers, having access to non-public information, could use it for financial gain, placing them in a privileged position compared to ordinary market participants. Steil emphasizes: "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 the bill prohibits
The document builds on an earlier initiative — the Stop Insider Trading Act, approved by the committee on January 14. The new law targets bets on specific government decisions, government actions, and outcomes of political events. Violators face a fine of $2,000 or 10% of the bet amount — whichever is greater. Profits obtained from such transactions must be returned. Importantly: the fine cannot be paid from official funds, the Senate budget, or political donations. Those who resign without settling the debt may be referred to the Department of Justice for a civil lawsuit. Sports and other non-political markets are not subject to the law.
Platforms and Congress prepare for new rules
Steil's bill is part of a broader wave of regulation. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own bill — the Public Integrity in Financial Prediction Markets Act — aimed at combating trading on non-public information on any platform. The House of Representatives also has a similar PREDICT Act, covering officials' families. Earlier, the Senate, through a separate decision, already banned senators and their staff from betting on prediction markets.
The passage of the law largely depends on bipartisan agreements, but both chambers are clearly moving in the same direction. Market operators themselves are also preparing for stricter rules: Kalshi launched a risk assessment system and employment verification in June, while Polymarket integrated Chainalysis for on-chain monitoring and is building a system to identify insiders.
Cryptalist's comment: This is a logical step in an era when prediction markets are becoming a powerful tool of influence. The ban for lawmakers is not a restriction of freedom, but a necessary measure to protect the integrity of both the political system and the platforms themselves. If insider betting is not stopped, trust in Polymarket, Kalshi, and similar services will be completely undermined. The market expects not just regulation, but clear rules of the game for everyone.