A ban on betting on Kalshi and Polymarket is being prepared for the U.S. Congress: a new era of regulation for prediction markets.
Regulatory pressure around prediction markets is tightening. In the United States, the Stop Lawmakers from Predicting Act has been introduced, which directly prohibits members of Congress, their spouses, and minor children from participating in bets on political outcomes and government decisions through platforms such as Kalshi and Polymarket.
The essence of the initiative: combating insider trading on prediction markets
The author of the bill is Republican Bryan Steil, who chairs the House Committee on Administration. The main message is to prevent lawmakers from using confidential information, unavailable to ordinary market participants, for personal enrichment.
The bill is a logical continuation of the Stop Insider Trading Act, approved by the committee on January 14. According to Steil, the goal is to restore trust in public officials. "Americans should be confident that their congressman is not profiting from insider information. Lawmakers should write laws, not bet on their outcomes," the politician emphasized.
The ban applies to bets concerning specific government decisions, actions of authorities, and outcomes of political events. Violators face a fine of $2,000 or 10% of the bet amount—whichever is greater. Any profits obtained must be returned. Notably, it will be impossible to pay the fine using official funds, Senate budgets, or political donations. For those who resign without settling the debt, the case will be referred to the U.S. Department of Justice for a civil lawsuit. Sports betting and other non-political events are not covered by the law.
Coordination of efforts and platform reactions
Steil's initiative is part of a broader trend toward tightening control. 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 of non-public information on any platforms. A similar PREDICT Act is also being discussed in the House of Representatives.
The market operators themselves are already adapting to the new realities. In June, Kalshi launched a risk assessment system, employment verification, and whistleblower channels to prevent insiders from entering the platform. Polymarket, in turn, has integrated Chainalysis and is building an online monitoring system.
My analysis: This is a landmark precedent. Prediction markets have long existed in a "gray" zone. Now, regulators are clearly signaling that anonymity and access to privileged information are incompatible with the principles of fair play. The adoption of the law could serve as a catalyst for global tightening of rules and raising compliance standards across all prediction platforms, which in the long term will make them more legitimate but also more centralized.