US Lawmakers Face Proposed Ban on Political Prediction Market Betting

Steil Targets Political Betting by Members of Congress

Representative Bryan Steil of Wisconsin is preparing to introduce a provision that would prohibit members of Congress, their spouses, and dependent children from placing wagers on prediction markets involving political, electoral, or policy-related outcomes.

The proposal is being attached to pending legislation that would also restrict lawmakers from purchasing new shares of individual stocks, except when those shares are acquired through dividends generated by existing holdings.

Steil, who chairs the House committee responsible for overseeing congressional ethics and conduct rules, argues that prediction markets linked to areas where lawmakers may possess non-public information create significant ethical concerns.

Penalties for Insider-Based Prediction Market Activity

Under the proposed measure, lawmakers who participate in prediction market trades involving events about which they possess insider knowledge could face financial penalties.

The legislation would require violators to pay either USD 2,000 or 10% of the value of the transaction—whichever amount is greater—in addition to surrendering any profits generated from the activity.

The proposal reflects increasing attention from policymakers toward the intersection of financial markets, event contracts, and government decision-making, particularly as prediction markets continue expanding in visibility and trading volume.

Sports Betting Exemption Included in Proposal

While the measure would prohibit participation in political and policy-related prediction markets, it would still allow lawmakers and their families to engage in event-based markets outside the political sphere, including sports-related contracts.

"Some avenues of prediction markets I don’t think create the ethical complications that other areas do,” Steil said.

The congressman cited sports events as an example of markets that do not present the same conflict-of-interest risks associated with legislative or governmental information.

“If an individual or their spouse or dependent child wants to predict the winner of the Super Bowl, I don’t think that that is a unique ethical challenge in the House,” he added.

Growing Regulatory Focus on Prediction Markets

The initiative arrives as platforms such as Kalshi and Polymarket continue attracting attention from regulators, policymakers, and industry stakeholders.

Prediction markets have increasingly become part of broader discussions surrounding gaming, financial regulation, and event-based trading, particularly in the United States, where questions remain regarding oversight frameworks and permissible market categories.

Earlier this year, the US Senate adopted a rule change prohibiting senators and Senate staff from participating in prediction markets, signaling growing concern over potential conflicts of interest within government institutions.

Legislative Path Remains Uncertain

The broader congressional trading bill already has support from House Speaker Mike Johnson and President Donald Trump, and Republican lawmakers have pledged to bring the measure to a vote on the House floor.

However, the legislation faces significant hurdles before becoming law. In addition to passing the House, it must secure approval in the Senate, where the broader stock-trading restrictions have faced criticism from Democrats because they apply specifically to members of Congress and do not address the president's financial activities.

For the gaming and prediction market sectors, the proposal represents another indication that US policymakers are paying closer attention to event-contract markets, particularly where political outcomes and potential access to privileged information intersect.