Congressmen in the Crosshairs: New Bill Bans Political Betting via Kalshi and Polymarket
The U.S. legislative body is once again demonstrating its determination to bring order to the realm of prediction markets. Wisconsin Republican and Chairman of the House Committee on Administration, Bryan Steil, has introduced a high-profile bill, the Stop Lawmakers from Predicting Act. The document directly prohibits members of Congress, their spouses, and minor children from betting on political outcomes and government decisions using platforms such as Kalshi and Polymarket.
What is the essence of the ban?
Steil's initiative is essentially a logical extension of the previously passed Stop Insider Trading Act, which the committee approved back on January 14. The main driving force behind the bill is the concern that lawmakers, possessing non-public information, could gain an unfair advantage over ordinary market participants. As Steil rightly notes, congressmen should be writing laws, not betting on their outcomes. The law aims to restore trust in public officials.
"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.
The new law applies to bets on a wide range of political events: from specific government decisions to election outcomes. Violators face a significant fine — $2,000 or 10% of the bet amount (whichever is greater), plus mandatory disgorgement of all profits obtained. Notably, the fine cannot be paid using official funds or political contributions. Furthermore, unpaid debts may be referred to the U.S. Department of Justice for civil collection. It is important to emphasize that the ban does not affect bets on non-political events, such as sports.
Platforms and Congress: Readiness for New Rules
Steil's bill is just one part of a broader campaign to tighten control. 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 insider trading on any platform. The House of Representatives also has a similar document, the PREDICT Act. Previously, the Senate, through a separate decision, had already banned senators and their staff from betting on prediction markets.
The market operators themselves are not standing idly by. In June, Kalshi implemented a risk assessment system, employment verification, and whistleblower channels to prevent insiders from accessing the platform. Polymarket, for its part, has brought in Chainalysis and is building an online monitoring system. The passage of the law will largely depend on bipartisan agreements, but the trend is clear: a growing consensus is forming in both the Senate and the House of Representatives regarding the need for strict regulation in this area.
Analyst's Comment: Prediction markets have long become a powerful tool for hedging risks and gathering information. However, the potential to use insider information to profit from political outcomes poses a direct threat to the integrity of the system itself. This legislative initiative is an important step towards creating transparent and fair rules of the game, where all participants, regardless of their status, have equal opportunities. If the law is passed, it will set a precedent that could be adopted in other jurisdictions as well.