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House Administration Committee Chairman Bryan Steil, R-Wis., introduced legislation last week that would prohibit members of Congress, their spouses, and dependent children from participating in prediction markets tied to political or policy outcomes.
The measure, titled the Stop Lawmakers From Predicting Act, would bar covered individuals from placing or holding event-based contracts on topics including government policy, official actions or election-related outcomes. The proposal aims to close what supporters describe as a potential avenue for profiting from nonpublic or inside information gained through public office.
“The American people deserve to know their Member of Congress is not profiting off insider information,” Steil said in a statement. “Lawmakers should be writing policy, not wagering on its outcome.”
Enforcement and penalties under the proposal
Under the proposal, violators would face a penalty equal to $2,000 or 10% of the transaction value, whichever is greater, in addition to forfeiture of any net gains from the prohibited trade.
Lawmakers would be barred from using official allowances, campaign funds or office budgets to pay fines. The legislation also provides for civil enforcement by the Department of Justice if a member resigns or leaves office without settling outstanding penalties.
According to a news report by Fox Business, the bill is currently under consideration by the House Administration Committee. If approved, it would need to pass both chambers of Congress and be signed by the president before becoming law.
The proposal builds on earlier congressional efforts to restrict financial conflicts of interest, including legislation targeting insider trading in financial markets and recent Senate action banning lawmakers and staff from participating in prediction markets.
Rising concerns over political prediction markets
The legislation comes amid increased scrutiny of prediction markets, which allow users to trade contracts tied to real-world outcomes such as elections, legislation and geopolitical events.
Platforms such as Kalshi and Polymarket have faced questions from regulators and lawmakers over whether political event contracts could be vulnerable to misuse or insider trading.
Recent legislative activity has intensified that scrutiny. In April, the Senate unanimously approved a resolution prohibiting senators, officers and staff from participating in prediction markets. Lawmakers have also advanced additional proposals aimed at restricting trading on sensitive political or national security-related events.
Broader push on congressional trading rules
The bill is part of a wider congressional effort to tighten ethics rules governing lawmakers’ financial activity. Separate proposals, including measures such as the Stop Insider Trading Act and the BETS OFF Act, would further restrict lawmakers’ ability to trade on or profit from politically sensitive information, including wars, elections and major policy decisions.
Supporters of these efforts argue that existing disclosure requirements and ethics rules do not go far enough to prevent conflicts of interest involving rapidly evolving financial products like prediction markets.
