Democrats Vow to Rein In $10 Billion Prediction Markets as Insider Trading Fears Grow
Updated
Updated · POLITICO · Nov 10
Democrats Vow to Rein In $10 Billion Prediction Markets as Insider Trading Fears Grow
3 articles · Updated · POLITICO · Nov 10
Summary
Victorious Democrats are moving to tighten oversight of prediction markets after the midterms, arguing the platforms raise risks around insider trading, gambling-law evasion and betting on real-world events.
Kalshi and Polymarket, valued in the tens of billions of dollars, say they operate as regulated financial exchanges rather than gambling venues and pitch their contracts as tools for forecasting and hedging risk.
Kalshi told lawmakers it had more than a dozen active inquiries tied to election trading as of Nov. 2, citing that enforcement work as evidence it already polices manipulation and illicit trading.
The scrutiny follows what Kalshi called the first prediction-market election, in which the platforms broadly forecast Democratic wins in both the House and Senate while missing some surprise races.
That success has made the companies Wall Street standouts but also bigger political targets, prompting Kalshi to expand its Washington lobbying bench and Polymarket to publicly invite bipartisan regulation.