Key Takeaways:
A House committee approved legislation barring members of Congress from betting on prediction markets, advancing the most direct curb yet on a $25.7 billion industry.
The House Administration Committee voted 5-4 Wednesday to advance the Stop Lawmakers From Predicting Act, barring members of Congress, their spouses and dependent children from wagering on government and political outcomes on platforms such as Kalshi and Polymarket.
"The American people deserve to know their member of Congress is not profiting off insider information," said Rep. Bryan Steil, the Wisconsin Republican who chairs the committee and introduced the bill.
Violators would face a fine of $2,000 or 10% of the transaction's value, whichever is greater, plus forfeiture of any profit. Lawmakers could not use office accounts or campaign funds to pay the penalty, and those who leave office without settling could be referred to the Justice Department for civil enforcement. The bill carves out sports and other non-government events, targeting only bets most prone to abuse. Kalshi and Polymarket together cleared $25.7 billion in trading volume in April, according to company data.
The legislation, backed by President Donald Trump and House Speaker Mike Johnson, now heads to a full House floor vote. It joins more than a dozen prediction-market bills on Capitol Hill, including the bipartisan Public Service Accountability Act introduced Wednesday by Reps. Maggie Goodlander (D-N.H.) and Brian Fitzpatrick (R-Pa.), which would extend the ban across all three branches of government — Congress, the White House and the federal judiciary.
A cascade of competing bills
Steil had originally sought to attach prediction-market restrictions to the Stop Insider Trading Act, a broader stock-trading bill his committee advanced in January. That legislation has since stalled, prompting him to introduce the prediction-market provisions separately. The Senate already acted in April, voting by unanimous consent to bar senators and staff from prediction markets, a measure championed by Sen. Bernie Moreno (R-Ohio).
The House bill does not extend the ban to congressional staff, though some lawmakers have imposed that restriction on their own offices, according to Bloomberg Government. The White House separately ordered staff in March not to place wagers on prediction markets.
The push follows a series of insider-trading incidents that have sharpened scrutiny of the industry. Federal prosecutors arrested an active-duty U.S. Army soldier in May on charges that he used classified information about the capture of Venezuelan President Nicolas Maduro to place a $400,000 Polymarket bet. The House Oversight Committee has since opened an investigation into Kalshi and Polymarket, with Chairman James Comer (R-Ky.) citing a pattern of insider trading.
Industry at a regulatory crossroads
Prediction-market companies have publicly supported the congressional ban, arguing it could strengthen confidence in the industry. Kalshi has rolled out anti-insider-trading tools and introduced employment verification for high-risk contracts. Polymarket, barred from U.S. users since 2022, faces separate scrutiny after the Wall Street Journal reported it paid influencers to post videos of fake successful bets.
The regulatory landscape remains fragmented. A bipartisan bill from Sens. Dave McCormick (R-Pa.) and Kirsten Gillibrand (D-N.Y.) would set federal standards for the industry. Kalshi is suing Minnesota to block what would be the first state felony ban on prediction markets, arguing the contracts are derivatives under exclusive Commodity Futures Trading Commission jurisdiction.
Congress has struggled for years to restrict its own financial activity, and past stock-trading reforms have stalled despite broad public support. The backing of Trump and Johnson gives this bill unusual early momentum, though it still faces a House floor vote and Senate approval before becoming law. The stack of competing bills shows how quickly prediction markets have moved from a niche product to a mainstream policy fight — one where how the industry operates, and who gets to participate, may determine its future.
This article is for informational purposes only and does not constitute investment advice.
