Blocking Insider Trading: Ban on Lawmakers Participating in Prediction Markets, Related Bill Approved by Key House Committee
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According to Bloomberg, the U.S. House Committee on Administration approved a bill on Wednesday banning members of Congress from participating in prediction market transactions related to politics and government affairs, paving the way for the bill to be submitted to the full House for a vote.
The bill was spearheaded by Committee Chair Bryan Steil (Republican from Wisconsin) and passed with 5 votes in favor and 4 against. Democratic opponents argued that the bill’s restrictions on betting using insider information are still insufficient.
Under the bill, members of Congress, their spouses, and dependents would be prohibited from betting in prediction markets involving government decisions or political actions.
Joe Morelle (Democrat from New York), the committee’s ranking Democratic member, proposed an amendment to broaden the ban's scope to include members, political candidates, their staff, and all their family members, and to prohibit participation in prediction market transactions including platforms like Polymarket and Kalshi. This amendment was ultimately rejected with 4 votes in favor and 5 against, with the vote largely following party lines.
The House Committee on Administration, which is responsible for establishing rules of conduct for House members, has in recent years tried to address the rise of the emerging prediction market industry, as well as long-standing controversies over congressional stock trading. Over the years, both parties have pushed for a ban on congressional stock trading, and with the public support of bipartisan House leadership and Trump, momentum for related reforms has significantly increased this session.
However, there remains substantial disagreement between the two parties on how to regulate prediction markets and congressional stock trading. Morelle criticized Steil’s proposed bans on prediction markets and stock trading as insufficient, saying they did not require members to sell existing stock holdings nor prohibited participation in prediction markets that are unrelated to politics.
Steil stated earlier this month that he hopes to package the prediction market ban and congressional stock trading ban together and submit them to the full House for review this summer.
If the bill passes the House, it will still need Senate approval to officially become law. Notably, the United States Senate has previously unanimously passed internal rules prohibiting senators and their staff from participating in prediction market transactions.
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