Representative Bryan Steil introduced legislation to ban lawmakers, spouses, and dependents from betting on political and policy outcomes in prediction markets. The bill aims to prevent insider trading and restore public trust.
This legislation addresses concerns about potential conflicts of interest and insider trading among lawmakers, aiming to bolster public confidence in government integrity by preventing elected officials from financially benefiting from nonpublic information about policy and political events.
Representative Bryan Steil has introduced legislation, the Stop Lawmakers from Predicting Act, designed to prevent members of Congress and their immediate families from engaging in financial speculation on prediction markets related to government policies and political events. The bill, which is five pages long, seeks to prohibit lawmakers, their spouses, and dependents from placing bets on outcomes such as specific government actions, policy changes, or election results.
Steil stated that the legislation is crucial for restoring public trust, asserting that elected officials should focus on policy creation rather than wagering on its results. The move comes amid a surge in the popularity of prediction markets like Kalshi and Polymarket, raising concerns about the potential for insider trading using nonpublic information. These concerns were amplified by an incident where an anonymous user reportedly profited significantly from a bet on the removal of Venezuelan President Nicolás Maduro, leading to the arrest of a U.S. Army Soldier for allegedly using confidential information.
The proposed law includes penalties for violations, which could amount to fines of approximately $2,000 or 10% of the transaction's value, whichever is greater, in addition to any net gains realized from the bet. This measure is intended to complement existing legislation, such as the Stop Insider Trading Act, which targets lawmakers' trading of publicly available stocks. The Senate has also recently taken steps to bar its members from trading on prediction markets, and platforms like Kalshi and Polymarket have indicated they are implementing measures to curb insider trading.