A new bill would ban lawmakers in Congress from placing bets on prediction markets related to public policy issues and elections that they could be in a position to profit from by using insider information.
The Stop Lawmakers From Predicting Act was introduced Thursday by House Administration Committee Chairman Bryan Steil, R-Wis., which would ban members of Congress as well as their spouses and dependent children from placing a wager on a prediction market on topics that the lawmaker may have inside information on.
The ban would cover wagers on the occurrence, nonoccurence or the extent of the occurrence of specific government policies and actions, a political outcome or any other event which came to the attention of a covered individual as a direct or indirect result of the lawmaker’s service in Congress.
“The American people deserve to know their Member of Congress is not profiting off insider information,” Steil said. “This legislation is critical to restoring the public’s trust in their elected officials. Lawmakers should be writing policy, not wagering on its outcome.”
SENATE QUIETLY BANS LAWMAKERS FROM BETTING ON PREDICTION MARKETS
Steil’s bill would punish violators of the law precluding lawmakers from placing political and policy wagers on prediction markets with a fee equal to $2,000 or 10% of the value of the prohibited transaction, whichever is greater, and the net gain from the transaction.
The bill would also prohibit lawmakers from using their Members’ Representational Allowance, Senate personnel and office expense account, or political contributions or donations to pay the fine.
Lawmakers who resign from office or retire without paying the fine could be referred to the Justice Department for civil enforcement if the bill were to become law.
BLOCKCHAIN ANALYSTS SAY TRADERS MAY HAVE USED INSIDER INFORMATION TO PROFIT ON IRAN CONFLICT BETS
Steil’s introduction of the prediction market ban for lawmakers comes after his panel, the Committee on House Administration, advanced the Stop Insider Trading Act to the House floor in January.
It also follows an incident in March in which blockchain analysts identified suspected insiders who placed suspiciously timed bets on prediction markets related to the Iran conflict, including markets related to the U.S. striking Iran as well as the death of Ayatollah Ali Khamenei. The bets generated significant profits and may have been placed using insider information.
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