U.S. Representatives are taking a stand against the growth of prediction markets by proposing a prohibition against contract trading for government officials.
A House Democrat on Wednesday introduced a bill to prohibit senior government workers from trading stocks and using prediction markets during their service.
That same day, the House Administration Committee’s GOP members voted in favor of a separate proposal, which would block lawmakers and their families from making trades related to political events, including elections and government actions.
The Republicans’ bill
House Republicans forwarded HR 9367, known as the Stop Lawmakers from Predicting Act, setting the stage for it to receive a vote on the chamber floor.
“Lawmakers elect to serve the American people, not to enrich themselves by wagering on outcomes from the decisions they make,” Wisconsin Rep. Bryan Steil (R), the man behind the bill, told Politico. “We have a real opportunity to restore trust in Congress by taking necessary steps to eliminate even the appearance of impropriety.”
The proposal would impose a fine of $2,000 or 10% of the value of a purchased contract and all net gains it produced for violators.
The bill did not receive the same approval from House Democrats as it did from Republicans. The Democrats are holding out for a new piece of legislation that would close possible loopholes and implement broader enforcement.
The Democrats’ counter
The Democrats’ solution to their holdout may have just been introduced by Rep. Maggie Goodlander (NH).
HR 6254, known as The Public Service Accountability Act, was also presented on Wednesday. It aims to rebuild trust with citizens by eliminating the possibility of insider trading for financial gain.
“Public service is a sacred trust. But right now, senior American officials in some of the most powerful positions of public trust can sit in on a briefing in the morning and trade on what they heard that afternoon — making decisions about war, about tariffs, about billion-dollar court cases and personally profiting from the outcomes,” said Goodlander. “That’s dead wrong, and our bipartisan bill will help put a stop to this corrupt betrayal of trust by closing gaping loopholes and making a commonsense rule of law crystal clear: that in America, people who hold public power must be accountable to the American people and serve the public interest — not their own personal profits.”
If approved, the bill would block government workers in all three branches from buying and selling contracts on Kalshi, Polymarket, Robinhood, and other popular platforms offering prediction markets. That includes markets in all industries, not just those related to elections and government actions.
The dangers of insider trading
Insider is not only banned at the top prediction platforms—it is also illegal when it comes to buying or selling prediction contracts. The Department of Justice views these actions as a form of commodities or wire fraud, which carry substantial penalties.
Despite that, incidents of supposed or confirmed insider trading have occurred. The best example came on Polymarket earlier this year, when a U.S. soldier with access to sensitive information won more than $400,000 by predicting the capture of former Venezuelan President Nicolás Maduro.
NPR also reported that disgraced politician George Santos was under investigation by the Department of Justice for illegal trading at Kalshi. According to the report, Santos manipulated the public by saying that he would attend President Donald Trump’s State of the Union address in February, and then profited by purchasing prediction contracts that said he would not come and failed to appear.
Santos vehemently denied the “preposterous” accusations.
The Trade Handle Prediction Markets Take
The U.S. Senate has already made its criticism of prediction markets known. Once House Representatives can cross party lines to agree, the practice and concerns of insider trading should be quelled. That is unlikely to bear little impact on their national popularity, which seems to increase with every passing day.