U.S. Representative Bryan Steil (R-Wis.), who chairs the House Administration Committee, has put forth a new piece of legislation that seeks to prevent members of the House, along with their spouses and dependent children, from engaging in prediction markets. This move comes amid increasing scrutiny regarding the financial dealings of lawmakers.
The proposed legislation, titled the Stop Lawmakers From Predicting Act, is part of a larger initiative in Congress aimed at ensuring that lawmakers do not exploit their positions for personal financial benefits.
This bill specifically targets participation in prediction market platforms like Kalshi and Polymarket, which enable users to trade contracts based on the outcomes of various events, including political and economic scenarios.
While the prediction market industry has experienced significant growth, especially during the more lenient regulatory climate under former President Donald Trump, this increased attention has also led to heightened scrutiny from Congress.
Representative Steil emphasized, “The American people deserve to know their Member of Congress is not profiting off insider information. Lawmakers should be writing policy, not wagering on its outcome.”
If the bill is enacted, any member found to be in violation would face a fine of either $2,000 or 10% of the transaction's value, whichever is higher, in addition to any profits gained from such activities. Furthermore, lawmakers would be prohibited from using official office funds or campaign contributions to cover these penalties.
Interestingly, the proposed legislation does not apply to congressional staff, although several lawmakers have already taken steps to ban their staff from participating in prediction markets.
This legislative effort follows a Senate action in April, where a measure was unanimously passed to bar senators and their staff from engaging in prediction markets. Shortly thereafter, Representative Ashley Hinson (R-Iowa) introduced a bill to amend House rules to impose a similar ban, urging House leadership to act swiftly on the matter.
However, House Republicans have not yet moved forward with a ban on lawmakers participating in these markets. Speaker Mike Johnson (R-La.) has indicated the need for consensus before proceeding, while House Majority Leader Steve Scalise (R-La.) has pointed to Steil's initiative, noting that committees exist to ensure the proper handling of this issue.
Concerns regarding insider trading in prediction markets have intensified this year, particularly following federal charges against a U.S. soldier accused of using confidential information to trade on the capture of former Venezuelan leader Nicolás Maduro on Polymarket. Additionally, trading activities linked to former Republican congressman George Santos have also been referred to federal authorities, focusing on bets made on Kalshi regarding Santos's attendance at President Trump's State of the Union address. Reports from NPR and CNN indicate that Kalshi detected suspicious activity, identified Santos's account, froze it, and reported the situation to both the U.S. Department of Justice and the Commodity Futures Trading Commission.