House Republicans are looking to widen a congressional trading ban so it would also cover prediction market contracts. Rep. Bryan Steil, chair of the House Administration Committee, said lawmakers are working to add that language to H.R. 7008, the bill aimed at restricting stock trading by members of Congress, their spouses, and dependents.
At a Thursday roundtable, Steil said he does not think lawmakers should place trades tied to elections or public policy outcomes. He told reporters, “In my conversations with members and just the broad public, I don’t think anyone believes that members of Congress should be making trades on elections or making trades on public policy.” If that language is added, platforms including Polymarket and Kalshi could fall under the same restrictions now being considered for stock transactions.
Bill would tighten disclosure and penalty rules
Under the current version of H.R. 7008, lawmakers and their immediate family members would be barred from buying publicly traded individual stocks. Members would also need to disclose an intention to sell at least seven days before completing a transaction. Violations would bring penalties of $2,000 or 10% of the investment’s value, whichever is greater, along with forfeiture of realized profits.
The bill cleared committee in February and has been placed on the House calendar, which makes it eligible for floor consideration. Bloomberg Government reported that Steil expects the House could vote on the measure during the summer. The legislation does not currently address cryptocurrencies directly, but Steil’s comments show that prediction markets are now being pulled into the same debate over trading restrictions for public officials.
Washington scrutiny has expanded beyond stock trades
Congressional concern has centered on whether people with direct knowledge of future events can gain an edge in prediction markets. Last month, House Oversight Committee Chairman James Comer opened inquiries into Polymarket and Kalshi, citing reports of insider trading activity. According to Comer’s statement, investigators asked for information on user verification procedures, geographic restrictions, and systems meant to detect suspicious trading behavior.
Those concerns have surfaced in earlier cases as well. Kalshi said earlier this year that it suspended three political candidates after finding that they traded contracts linked to their own election races, which the company said violated exchange rules. Federal investigators also reviewed trading activity connected to former U.S. Representative George Santos, another case cited by critics focused on the use of non-public information.
Consumer protection questions are adding pressure
A separate group of lawmakers is also asking federal regulators to examine how prediction market firms describe themselves to the public. Earlier, nine House Democrats led by Representatives Kevin Mullin and Gabe Vasquez urged the Federal Trade Commission to investigate whether some companies use different messaging in advertising than they do in regulatory proceedings.
According to those lawmakers, some marketing materials have used language associated with sports betting, while the companies have argued before regulators that they offer financial contracts. Mullin said that gap could leave consumers unsure about which rules and protections apply. The lawmakers asked the FTC to respond by June 29 and explain whether it has received complaints about prediction markets or plans any enforcement action.
The sector has continued to grow even as the pressure builds. Earlier reporting by crypto.news said prediction markets processed about 191 million transactions in March, with monthly trading volume reaching roughly $23.9 billion. Political, economic, and geopolitical contracts accounted for much of that activity, drawing greater attention in Washington.