Key Moments
- A House bill, titled the “Stop Lawmakers From Predicting Act,” would ban members of Congress and their families from trading prediction markets tied to political or government events.
- In addition, the proposal sets penalties of at least $2,000 or 10% of transaction value. It also requires forfeiture of any profits, which would go to the U.S. Treasury.
- Moreover, the bill follows recent Senate action that blocks similar activity for senators and staff. Overall, it reflects growing concern about insider trading risks.
New House Proposal Targets Political Betting by Lawmakers
A new House bill aims to stop members of Congress and their families from profiting in prediction markets linked to political events.
Rep. Bryan Steil introduced the “Stop Lawmakers From Predicting Act.” The bill would amend title 5 of the U.S. Code. It would restrict trading in contracts tied to elections, policy decisions, and government actions.
Lawmakers say the move addresses concerns about misuse of privileged information. In other words, it targets potential insider trading risks.
“The American people deserve to know their Member of Congress is not profiting off insider information,” Steil said. He added that lawmakers should “write policy, not wager on outcomes.” As a result, the bill aims to restore public trust.
Scope of the Ban and Covered Individuals
The bill defines “covered individuals” as members of Congress, their spouses, and dependent children. These individuals would not be allowed to trade contracts tied to political outcomes or government actions.
Furthermore, the ban applies even when the event is not directly linked to a lawmaker’s duties. To ensure clarity, the ethics office would issue guidance on unclear terms.
Penalties, Enforcement, and Timeline
If a violation occurs, covered individuals would face penalties equal to $2,000 or 10% of the transaction value, whichever is higher.
In addition, lawmakers would lose any profits from prohibited trades. They also could not use official funds, office budgets, or campaign money to pay fines.
All collected penalties would go to the U.S. Treasury. Meanwhile, the ethics office would enforce the rules and could refer cases to the Department of Justice after officials leave office.
Finally, the law would take effect 180 days after enactment. According to CNBC, House Speaker Mike Johnson and President Donald Trump support the proposal.
| Key Provision | Details |
|---|---|
| Who is covered | Members of Congress, spouses, and dependent children |
| Prohibited activity | Prediction markets tied to political or government outcomes |
| Minimum penalty | $2,000 or 10% of transaction value |
| Disposition of gains | Forfeiture of profits from illegal trades |
| Use of official funds | Official and campaign funds cannot pay penalties |
| Effective date | 180 days after enactment |
Senate Action and Broader Crackdown on Prediction Markets
The proposal follows recent Senate action. Senators unanimously voted to block prediction market betting for members and staff.
Lawmakers argue the practice could resemble insider trading. In addition, Senator Elissa Slotkin warned it could create national security risks.
Sen. Bernie Moreno led the effort. He said public service should not become a “side hustle.” Therefore, he pushed for stronger ethics rules.
Calls to Extend Restrictions Beyond Congress
Some lawmakers want broader restrictions. Senator John Curtis supported the Senate vote, but he said the ban should extend beyond Congress.
He later worked with Rep. Slotkin and Sen. Todd Young on a wider proposal. It would also cover the president and vice president.
Overall, these moves show a broader push to tighten oversight of prediction markets. They also align with efforts to curb insider trading concerns in financial and betting platforms.
- Author
Daniel Williams
