Nikki Budzinski

“The American people are tired of politicians using their influence for personal gain, and the rise of prediction markets has made those concerns even more relevant,” Budzinski said in a press release. “In recent months, we’ve seen instances of little-known traders making massive profits on events ranging from war with Iran to how long a government shutdown will last, raising necessary questions about the use of inside information.”

The bill establishes consequences for lawmakers found to be in violation of the new ban. That includes a fine equal to 10% of the value of the transaction and the full confiscation of any profits. The penalties would be paid into the U.S Treasury. Lawmakers would be prohibited from using campaign contributions or congressional funds to pay the penalties.

The bill comes as banning insider stock trading remains at a standstill, despite multiple bipartisan pushes. The last legislation on this issue to be signed into law was over a decade ago, in 2012.

Prediction markets have become increasingly popular, as many people have made large sums of money from world events, especially since President Donald Trump took office again.

This week, Polymarket released new “market integrity rules” focused on preventing individuals from profiting from stolen confidential information, illegal tips, or outcomes they have influence over. Kalshi, similarly, has added “new guardrails” to prevent sports participants and political candidates from trading on their own respective leagues and campaigns.

FOUR POSSIBLE OBSTACLES TO A SECOND RECONCILIATION BILL

The ban on lawmakers using the prediction market is only one of several bills introduced on the topic in recent weeks.