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U.S. Lawmakers Could Be Banned From Betting on Kalshi and Polymarket

A new U.S. bill would bar members of Congress and their families from betting on political outcomes through prediction markets. The move comes after concerns about possible inside information and market abuse.

By Mike Hesp
• 2 min read
U.S. Lawmakers Could Be Banned From Betting on Kalshi and Polymarket

Key Takeaways

  • U.S. lawmakers and their family members could soon be banned from betting on political outcomes through Kalshi and Polymarket.
  • Bryan Steil's bill sets penalties starting at $2,000 or 10% of the transaction, plus forfeiture of any profits.
  • Kalshi and Polymarket are taking steps against insider trading, while the CFTC is pushing platforms to improve verification and monitoring.

U.S. lawmakers, their spouses, and dependent children could soon be banned from betting on political outcomes and government policy through prediction markets like Kalshi and Polymarket. The proposal, introduced by Wisconsin Representative Bryan Steil, comes in response to growing concerns about alleged insider trading on these platforms.

New Bill Targets Politicians' Betting

The bill, called the Stop Lawmakers from Predicting Act, would bar members of Congress and their close relatives from betting on specific government actions, political decisions, or outcomes. Violators would face a fine of at least $2,000 or 10% of the transaction, plus forfeiture of any profits. On top of that, they would not be allowed to pay the fines with official allowances, political donations, or other government funds. If they do not pay, the case could be referred to the Department of Justice for civil enforcement.

Steil stressed that trust in elected officials needs to be restored: "The American people deserve to know their members of Congress are not profiting from inside information. Lawmakers should be making policy, not betting on the outcome."

Prediction Market Platforms Respond

Kalshi and Polymarket, two major prediction markets where users can bet on everything from politics to other events, have recently taken steps to curb insider trading. Kalshi has rolled out risk scores, employment checks, and a whistleblower channel, among other measures. Polymarket is working with Chainalysis to build an on-chain surveillance system.

These efforts line up with guidance from the Commodity Futures Trading Commission (CFTC), which is urging platforms to improve user verification and monitor suspicious trading activity. At the same time, there are also other bills in both the Senate and the House that would place similar limits on politicians and their families when it comes to trading on nonpublic information.

Why This Matters for Europe's Crypto and Regulatory Landscape

Even though the bill focuses on U.S. lawmakers and prediction markets, this development could also matter for European crypto and financial markets. It shows that regulators around the world are paying closer attention to possible conflicts of interest and insider trading on new digital trading platforms. European policymakers could use these U.S. efforts as a model when shaping their own regulations around prediction markets and related crypto activity.

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