Congressional scrutiny of prediction markets continues to expand. House Republican Representative Bryan Steil has introduced a new bill to restrict lawmakers and their immediate family members from betting on policy, government actions, and election results.
Members of parliament and their families are prohibited from placing bets.
Steil, who currently chairs the House Administration Committee, stated that the bill aims to prevent elected officials from profiting from information not yet available to the public and addresses concerns about politicians' involvement in predictive market trading.
According to the text of the bill, the restrictions apply to members of Congress, their spouses, and dependent children, and cover betting topics including legislative outcomes, government actions, and election results.
Penalties for violations target the source of revenue and funding.
According to the proposal, violators will be fined $2,000 or 10% of the bet amount, whichever is higher; if the bet has generated a profit, the violator will also have to return the profit.
The bill also stipulates that members of Congress may not use office funds, taxpayer-funded allowances, or campaign donations to pay fines. If the fines remain unpaid after leaving office, the case can be referred to the U.S. Department of Justice for civil prosecution.
Polymarket and Kalshi's scrutiny intensifies
Steil's office stated that the bill expands upon previously advanced legislation restricting insider trading in Congress. Steil had also indicated his desire to include similar provisions in another bill prohibiting members of Congress from trading stocks, but that bill has yet to reach a vote since passing the committee in February.
Prior to this proposal, Washington had already taken several related actions. In April of this year, the U.S. Senate passed a resolution banning senators and staff from using prediction markets; and in May, the House Oversight Committee launched an investigation into Kalshi and Polymarket, focusing on whether insider trading was occurring on the platforms.
This increased scrutiny is also related to a recent case. U.S. Army Sergeant Major Gannon Ken Van Dyke was arrested in April, accused of using classified information to bet over $400,000 on the removal of Venezuelan President Lás Maduro from office through the N-token program on Polymarket. Van Dyke has pleaded not guilty, and the trial is scheduled for December.
