A House panel advanced a bill Wednesday that would curtail how lawmakers can use prediction markets, responding to growing concerns over potential insider trading. House Administration Chair Bryan Steil, R-Wis., described the proposal as a narrow but important step in restoring public trust as midterm elections near.
The legislation targets a relatively new avenue for financial speculation, where contracts on political outcomes have raised alarm over whether members of Congress could leverage non-public information. Congressional approval ratings are hovering near record lows, adding urgency to the push.
Steil's proposal would apply specifically to sitting lawmakers and certain staff, limiting their ability to place bets on legislative or electoral outcomes. The full details of the penalty structure remain under negotiation, as the bill moves to the House floor for further debate.
Opponents argue the measure does not go far enough—leaving room for third-party intermediaries or family members to act on a lawmaker's behalf. Critics also contend it singles out prediction markets while ignoring broader insider trading loopholes in stocks and other assets.
The bill now heads to a floor vote, where its fate is uncertain amid partisan divisions over the scope of financial ethics reforms. If enacted, it would mark a rare federal restriction on the emerging market sector.