A new legislative effort aims to curb potential insider trading by U.S. lawmakers in the burgeoning prediction market space. Representative Bryan Steil (R-Wis.), Chairman of the House Administration Committee, introduced the "Stop Lawmakers From Predicting Act" on June 18, 2026. This bill seeks to ban members of Congress, along with their spouses and dependent children, from placing wagers on prediction markets concerning specific government policies, actions, or political outcomes.
The proposed legislation directly addresses growing concerns that individuals with privileged information could exploit prediction platforms like Kalshi and Polymarket for financial gain. Under the bill, violators would face significant penalties, including a fine of $2,000 or 10% of the prohibited transaction's value (whichever is greater), in addition to forfeiting any net gains from the wager. Furthermore, the bill explicitly states that lawmakers cannot use their official allowances, Senate expense accounts, or political donations to cover these fines, with provisions for referral to the Department of Justice for civil enforcement if fines remain unpaid upon resignation or retirement.
This initiative is particularly significant for the crypto regulation landscape as prediction markets, often leveraging blockchain technology for transparency and immutability, have become a focal point for regulatory scrutiny. The rapid growth and increasing trading volumes on these platforms have highlighted a gap in existing ethics rules for elected officials. By specifically targeting policy and political wagers, the bill aims to restore public trust in government, ensuring that lawmakers are focused on their duties rather than profiting from their unique access to information.
The introduction of Steil's bill is part of a broader, ongoing push to regulate prediction markets and prevent insider trading across various government sectors. Earlier in 2026, the Senate independently moved to ban its members and staff from participating in prediction markets through a rule change, signaling a bipartisan recognition of the issue. Additionally, a bipartisan bill known as the "Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act" (PREDICT Act) was introduced in March 2026 by Congresswoman Nikki Budzinski (D-IL) and Congressman Adrian Smith (R-NE), which extends similar prohibitions to a wider range of senior government officials, including the President, Vice President, and political appointees.
These legislative efforts underscore a concerted move by U.S. lawmakers to establish clearer ethical boundaries in an evolving digital financial landscape. The Commodity Futures Trading Commission (CFTC) has also been actively involved, proposing new rules that would grant the regulator authority to block prediction wagers deemed against public interest or susceptible to manipulation. The debate around prediction markets gained further traction following incidents where individuals allegedly used confidential information to profit from political outcomes, such as the reported case involving an anonymous Polymarket user and a U.S. Army soldier. Such events have intensified calls for robust regulatory frameworks to ensure fair play and maintain market integrity, making Steil's bill a crucial step in defining acceptable conduct for public servants in the age of decentralized finance and real-time information. The ongoing legislative activity reflects a growing consensus on the need for stricter oversight to prevent the exploitation of privileged information, thereby reinforcing the integrity of both financial markets and democratic processes.
Original announcement: WisPolitics