US lawmakers are preparing a ban on betting on Polymarket and Kalshi: a new law against insider trading
The U.S. legislative body is once again turning its close attention to prediction markets. Republican Bryan Steil, who chairs the House Administration Committee, has introduced a bill called the Stop Lawmakers from Predicting Act. The key goal of the document is to prevent members of Congress, their spouses, and minor children from gaining financial benefits by using insider information on platforms like Kalshi and Polymarket.
Steil's initiative is a logical continuation of the earlier Stop Insider Trading Act, which the committee approved on January 14. According to the author's intent, the new law aims to restore trust in public officials. "Americans must be confident that their congressman is not profiting from insider information. Lawmakers should write laws, not bet on their outcomes," Steil emphasized.
What exactly does the bill prohibit?
The ban covers bets related to specific government decisions, actions by authorities, and outcomes of political events. A serious fine is stipulated for violations: $2,000 or 10% of the bet amount, whichever is greater. Illegally obtained profits must be returned. Notably, it will be impossible to pay the fine using official expenses, Senate funds, or political donations. For those who attempt to resign without settling the debt, the case will be referred to the Department of Justice for a civil lawsuit. It is important to note that the law does not affect bets on non-political events, such as sports.
Multiple fronts in the fight for market integrity
Steil's bill is just part of a broader campaign. Earlier, in March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own Public Integrity in Financial Prediction Markets Act, aimed at combating trading of confidential information on any platforms. In the House of Representatives, the PREDICT Act is being advanced simultaneously, with similar measures for officials' families. Additionally, the Senate has already separately banned senators and their staff from betting on prediction markets.
Platform operators themselves are also preparing for stricter rules. Back in June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket, in turn, has brought in the analytics firm Chainalysis and is building an on-chain monitoring system.
Cryptalist expert opinion: The current wave of regulation is not just about combating insider trading, but an attempt to legitimize prediction markets as an asset class by cutting off the most toxic players. If the bills pass, we will see not the collapse of Polymarket and Kalshi, but their transformation into more transparent and controlled structures, which in the long term could attract institutional capital.