U.S. Representative Bryan Steil (R-Wis.), the chair of the House Administration Committee, has proposed a new bill aimed at prohibiting House members, along with their spouses and dependent children, from engaging in prediction markets, a move driven by increasing scrutiny over the financial dealings of legislators.
The initiative, known as the Stop Lawmakers From Predicting Act, is part of broader Congressional efforts to stop lawmakers from leveraging their roles for personal financial benefit.
This legislation targets participation in prediction market platforms like Kalshi and Polymarket, which facilitate trading on contracts based on various political and economic outcomes.
The rapidly growing sector has flourished amid a more lenient regulatory stance since the Trump administration, but this newfound attention has also triggered increased scrutiny, particularly from Congress.
“The American electorate has the right to know that their congressional representative isn’t capitalizing on private information,” Steil emphasized in a public statement. “Legislators’ focus should be on crafting policies, not betting on their results.”
According to the proposed bill, any member found in violation will face fines amounting to the higher of $2,000 or 10% of the transaction value, along with returning any profits gained. Additionally, the legislation disallows lawmakers from utilizing official office or campaign funds to cover such penalties.
While the bill does not extend to Congressional staff, some members have already prohibited their teams from engaging in prediction market activities.
This legislative push follows an action in the Senate, where a measure was unanimously approved in April to prevent senators and their staff from participating in prediction markets. Shortly thereafter, U.S. Representative Ashley Hinson (R-Iowa) introduced a bill to amend House rules, urging leadership to expedite its discussion on the House floor.
However, House Republicans have yet to advance a ban on lawmakers participating in these markets. Speaker Mike Johnson (R-La.) has indicated the necessity for consensus before any commitments can be made, and House Majority Leader Steve Scalise (R-La.) highlighted the importance of Steil’s initiative, stating that committees exist to “get this right.”
The concerns regarding potential insider trading in prediction markets escalated significantly earlier this year when a U.S. soldier was charged with allegedly using classified information to invest on Polymarket concerning the arrest of former Venezuelan leader Nicolás Maduro.
Additionally, trading activities associated with former Republican congressman George Santos have been flagged to federal authorities. This case revolves around bets placed on Kalshi concerning Santos’s attendance at President Donald Trump’s State of the Union address.
Reports by NPR and CNN reveal that Kalshi identified irregular trading patterns, traced the account to Santos, froze it, and notified both the U.S. Department of Justice and the Commodity Futures Trading Commission.