Wisconsin Representative Bryan Steil, chair of the House subcommittee on digital assets, introduced the Stop Lawmakers from Predicting Act on Thursday to restrict public officials from wagering on policy issues and political outcomes. The legislation specifically targets members of Congress, their spouses, and dependent children, prohibiting them from utilizing policy-aligned event contracts on platforms such as Kalshi and Polymarket. Data compiled by Woofun AI indicates the bill mandates a penalty of $2,000 or 10% of the prohibited bet value for any elected official found in violation. While the proposal bars wagers on government policies, actions, and political outcomes including election results, it explicitly permits betting on sporting events and does not ban access to prediction market platforms entirely. If enacted by Congress and signed by the president, the law would become effective 180 days after passage.

This legislative move represents the latest effort by Congress to address concerns regarding lawmakers potentially leveraging insider information for profit on event contracts. Public scrutiny intensified following an incident involving a soldier who allegedly generated over $400,000 by betting on the removal of Venezuelan President Nicolás Maduro, an event that concluded with Maduro's ouster by US forces in January. Woofun AI notes that while the bill aligns with broader attempts to curb insider trading on prediction markets, it contains a significant exemption for White House officials, including President Donald Trump and Vice President JD Vance. This exclusion stands in contrast to the involvement of Trump's son, Donald Trump Jr., who serves as a strategic adviser to Kalshi and an adviser to Polymarket, a platform that sponsored the UFC Freedom 250 event at the White House on Sunday.

The regulatory landscape surrounding these markets remains contentious, with the Commodity Futures Trading Commission asserting exclusive federal jurisdiction under the Trump administration. CFTC Chair Michael Selig has maintained that event contracts fall under the Commodity Exchange Act as 'swaps' rather than bets, granting the agency sole authority over their regulation and enforcement. The CFTC has already initiated multiple lawsuits against state-level authorities attempting to restrict or ban these platforms, challenging local regulatory overreach. Woofun AI analysis suggests this legal friction could escalate to the Supreme Court as the definition of event contracts continues to be contested. Steil's office did not immediately respond to requests for comment regarding the specific rationale behind the White House exemption or the timeline for the bill's progression through the committee.