Congressmen in the Crosshairs: New Bill Bans Political Betting via Kalshi and Polymarket
A tectonic shift is brewing in prediction markets. Republican Brian Steil, who chairs the House Administration Committee, has introduced the Stop Lawmakers from Predicting Act. The bill directly prohibits members of Congress, their spouses, and minor children from participating in bets on political events and government decisions using platforms such as Kalshi and Polymarket.
What the ban entails
The key motive is preventing insider trading on political markets. Steil is essentially expanding on ideas from the earlier Stop Insider Trading Act, which the committee approved back in January. The logic is ironclad: lawmakers have access to confidential information that is unavailable to ordinary market participants. Using this advantage for betting is a direct threat to the integrity of the system.
"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.
Violators face a fine of $2,000 or 10% of the bet amount—whichever is greater. Profits will have to be returned. Notably, the fine cannot be paid using official funds, the Senate budget, or political donations. Those who resign without settling the debt may be referred to the U.S. Department of Justice for a civil lawsuit. The law does not affect bets on non-political events, such as sports.
Broad coalition against insider trading
Steil's bill is just part of a large-scale regulatory crackdown. In March, Senators Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff introduced their own proposal—the Public Integrity in Financial Prediction Markets Act. Meanwhile, the PREDICT Act, with similar measures for the families of officials, is advancing in the House of Representatives. Earlier, the Senate separately banned senators and their staff from betting on prediction markets.
Notably, the platform operators themselves are not sitting idly by. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket has brought in Chainalysis and is building an on-chain monitoring system.
My expert opinion: Prediction markets are a powerful tool for aggregating information, but without clear rules of the game, they risk turning into a breeding ground for manipulation. Steil's initiative is a step in the right direction, but the key question is how effectively it can be implemented. Technical measures by the platforms themselves are good, but without a legislative stick, the insider problem will not be resolved. We are watching how quickly both chambers of Congress can agree on a unified position.