GOP bill to ban congressional insider trading on prediction markets faces industry pushback

Representative Bryan Steil's bill would add prediction markets to the existing ban on congressional stock trading, but this piecemeal approach treats only the most politically embarrassing abuse while ignoring the core harm: a lightly regulated, unaccountable market where wealthy speculators can buy influence over event outcomes—from elections to public health crises. The day before the bill was announced, Arizona Attorney General Kris Mayes filed criminal charges against Kalshi for operating an unlicensed gambling business and allowing election wagering (March 17, 2026). Meanwhile, the CFTC's first-ever event-contract insider trading charge (April 23, 2026) was against a U.S. Army soldier using classified military information to profit on Polymarket—not a Kalshi user. Kalshi voluntarily disciplined three political candidates for insider trading on its own platform (April 22, 2026), acting only after enforcement pressure, not through independent reform.

The real choice isn't between a congressional-only ban and no regulation; it's between piecemeal optics and a comprehensive regime that treats prediction markets as what they are—derivatives gambling on public events, subject to the same consumer protections and disclosure rules as any other financial product. The Arizona criminal charges demonstrate that state attorneys general are already stepping into the federal regulatory vacuum, but conflicting state and federal approaches create a patchwork that harms consumers and workers. A structural remedy would assign the CFTC clear authority to treat event contracts as gambling derivatives, require mandatory disclosure of trading algorithms and large positions, and empower states to enforce their own gambling laws without federal preemption challenges.