Congressmen in the Crosshairs: New Bill Bans Political Betting via Kalshi and Polymarket
Another legislative initiative is brewing in Washington that could fundamentally reshape the landscape of prediction markets. Republican Brian Steil, who chairs the House Committee on House Administration, has introduced the Stop Lawmakers from Predicting Act. This bill directly prohibits members of Congress, their spouses, and minor children from wagering on the outcomes of political events and government decisions on platforms such as Kalshi and Polymarket.
Steil's key motivation is to prevent the use of insider information. Lawmakers with access to confidential data could gain an unfair advantage in prediction markets, undermining trust in government institutions. "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should be writing laws, not betting on their outcomes," Steil stated, emphasizing the ethical underpinnings of his initiative.
Details and Penalties
The bill is a logical extension of the Stop Insider Trading Act, which the committee approved as early as January 14. The ban covers bets on specific government decisions, actions by authorities, and the results of political events. Violators face a fine of $2,000 or 10% of the bet amount—whichever is greater. Any profits obtained illegally must be returned. Notably, 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. Importantly, the law does not affect bets on non-political events, such as sports.
Context and Market Reaction
Steil's initiative is part of a broader campaign to regulate prediction markets. 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 confidential information across all platforms. In the House, the PREDICT Act is moving forward in parallel, with similar measures for the families of officials. Earlier, the Senate had already separately banned senators and their staff from betting on prediction markets.
The platforms themselves are preparing for new realities. As early as June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders. Polymarket, for its part, has brought in Chainalysis and is building an on-chain monitoring system.
Expert Opinion: This wave of regulation is an inevitable response to the rapid growth of prediction markets. However, in my view, a complete ban for congressmen is only a half-measure. The problem of insider information runs much deeper and will not disappear even if lawmakers are prohibited from playing. Prediction markets do not need bans but transparent and uniform participant verification standards that preserve their unique value as a forecasting tool without turning them into an arena for abuse.