In the U.S. Congress, a total ban on betting for politicians is being prepared: Kalshi and Polymarket are under threat.
American lawmakers are seriously tackling the regulation of prediction markets. Republican Bryan Steil, Chairman of the House Committee on House Administration, has introduced the Stop Lawmakers from Predicting Act. The bill directly prohibits members of Congress, their spouses, and minor children from wagering money on political outcomes and government decisions using platforms such as Kalshi and Polymarket.
The primary motivation is combating insider trading. Steil and his co-sponsors fear that lawmakers, having access to confidential information, could profit from bets unavailable to ordinary market participants. As Steil aptly put it: "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should be writing laws, not betting on their outcome." This statement reflects growing concern in Washington over ethical risks on rapidly popularizing platforms.
What exactly does the new bill prohibit?
The initiative expands on provisions of the earlier Stop Insider Trading Act, approved by the committee on January 14. The ban covers bets on specific government decisions, actions, and outcomes of political events. Violators face a fine of $2,000 or 10% of the bet amount (whichever is greater). Any profits gained must be returned. An important nuance: the fine cannot be paid using official expenses, Senate funds, or political donations. Those who resign without settling the debt may be referred to the U.S. Department of Justice for civil action. Bets on non-political events, such as sports, are not affected by the law.
Platforms and Congress prepare for new rules
Steil's bill is just 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 is simultaneously developing the PREDICT Act with similar measures for officials' families. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
Market operators themselves are not standing idle. 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 Chainalysis and is building an online monitoring system.
Cryptalist Analysis: Prediction markets are experiencing a boom, and lawmakers are clearly concerned that their colleagues might use privileged access for personal enrichment. This is a logical step from regulators, but it also highlights the growing importance of platforms like Polymarket and Kalshi as tools for hedging and speculation on political events. Combating insider trading is good, but we should not forget that excessive regulation could stifle innovation. We will closely monitor how this bill impacts trading volumes and liquidity on these platforms.