The House Administration Committee advanced legislation Wednesday that would bar members of Congress from trading on political and policy-related prediction markets.
With a 5-4 vote, the committee advanced House Resolution 9367, or the Stop Lawmakers From Predicting Act. It marks the first legislative step forward in the House on congressional prediction markets restrictions.
It is also the first of more than 20 prediction market-related bills to receive a hearing and advance in Congress. However, there have been Congressional hearings on the topic.
Specifics of prediction markets limits
Committee Chairman Bryan Steil introduced the legislation, which bans Congress members, spouses and dependent children from using prediction markets to wager on specific government policy, government action or political outcomes.
That includes election results, government policy decisions and other outcomes where lawmakers could have non-public information or influence.
The bill does not ban lawmakers from using prediction markets outright. Trades on sports or entertainment outcomes, such as the Super Bowl, would still be allowed.
The legislation creates a penalty of $2,000 or 10% of the value of the prohibited transaction, whichever is greater, plus the net gain from the transaction.
The vote and fractures
The vote revealed a party-line split within the committee over how far to go in clamping down on lawmakers’ use of prediction markets.
Republicans voted to advance the bill, while Democrats opposed it, raising questions about whether the measure will have broader support on the House floor. They also want a broader ban, similar to the internal rule created in the Senate.
Steil said the legislation is specifically designed to target markets related to public policy and elections, not to ban prediction markets overall. He also said he does not perceive any problem with lawmakers wagering on non-political matters such as sports event outcomes.
Senate already acted on prediction markets
The House is following the Senate, which already amended its rules in April to ban senators and their staff from participating in any prediction markets, including political and policy contracts.
The Senate measure was an internal rules change, while Steil’s bill is a statutory ban that would require both House and Senate passage and a presidential signature.
Steil’s bill would implement a more specific ban through legislation rather than just an internal rule change.
What comes next
Steil said he wants to attach the prediction market provision to legislation that prohibits lawmakers from purchasing stocks, which made progress in committee this year but has yet to be brought to a vote on the House floor.
House Republicans plan a summer vote on a congressional stock trading ban and restriction on lawmakers’ use of prediction markets, though leadership has not confirmed when a vote will occur.
If the bill passes and is signed into law, it could take effect 180 days after enactment, giving platforms time to adjust to the new restrictions and develop compliance systems. However, Kalshi CEO Tarek Mansour told CNBC Wednesday the platform already prohibits Congress and staff members from certain markets.
