The US is preparing a total ban on betting for members of Congress: Kalshi and Polymarket under fire
Prediction markets in the US are facing a new wave of regulatory pressure. Republican Brian Steil, Chairman of the House Committee on Administration, has introduced the Stop Lawmakers from Predicting Act. The bill directly prohibits members of Congress, their spouses, and minor children from betting on political outcomes and government decisions using platforms like Kalshi and Polymarket.
The main motivation for the initiative is combating insider trading. Steil emphasizes that lawmakers possess confidential information unavailable to ordinary market participants. Bets based on such data undermine trust in state institutions. "Lawmakers should be writing laws, not betting on their outcome," the congressman stated.
What exactly does the bill propose?
This is not the first such document. The Stop Lawmakers from Predicting Act builds on the provisions of the Stop Insider Trading Act, which the committee approved on January 14. The new bill introduces strict sanctions:
- Fine: $2,000 or 10% of the bet amount — whichever is greater.
- Disgorgement of profits: any income obtained is subject to seizure.
- Prohibition on paying fines: fines cannot be paid from official funds, Senate budgets, or political donations.
- Civil lawsuit: violators who resign or end their careers without paying the fine may be referred to the Department of Justice for prosecution.
Importantly, the law does not affect bets on non-political events, such as sports.
Context: Pressure is mounting
Steil's initiative is just part of a broader trend toward tightening. Earlier, 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 on any platform. The House of Representatives also has a similar document — the PREDICT Act.
The platforms themselves have already begun preparing for new rules. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels. Polymarket brought in Chainalysis to monitor suspicious activity and is building an on-chain analysis system.
Expert opinion: This wave of regulation is a logical response to the growing popularity of political markets. However, in my view, bans for lawmakers are just the tip of the iceberg. The issue of insider information on prediction platforms is much more acute, and if regulators do not find effective control mechanisms, it could lead to a complete ban on such markets in the US. Polymarket and Kalshi will have to prove their effectiveness in combating manipulation, otherwise, they may face the fate of many crypto projects that failed to reach an agreement with authorities.