Prediction markets and gambling groups raise their Washington spend

Prediction markets are spending more to shape Washington policy, and the gambling industry is answering with its own bigger push. For retail investors, the fight matters because it could decide whether event-contract platforms are treated more like financial exchanges or sports betting operators.

Kalshi, the largest U.S. prediction market platform, spent $990,000 directly on lobbying in the first half of 2026, according to federal lobbying disclosures released this week. Including outside firms, its total was nearly $1.8 million, CNBC reported. That already puts Kalshi near the $1 million it spent on lobbying for all of 2025.

Prediction markets let users trade contracts tied to future events, such as political outcomes, sports results or government actions. An event contract pays out based on whether a specified outcome happens. The policy fight centers on whether some of those contracts should be regulated as financial products or restricted as gambling.

Gambling groups are spending too

The American Gaming Association, which represents gambling companies, spent $1.39 million on lobbying so far in 2026, according to the disclosures cited by CNBC. With outside firms included, the group’s federal lobbying total was nearly $1.8 million, about 30% higher than in the first half of 2025.

Cherokee Nation, which has casino and gaming interests, spent $600,000 during the first half of 2026, also tracking ahead of its 2025 pace, according to CNBC.

Polymarket, Kalshi’s main rival, has a smaller presence in Washington. A lobbying firm working for Polymarket spent $180,000 on the company’s behalf in the first half of 2026, putting it on pace with the $360,000 spent in 2025, CNBC reported. Polymarket uses one lobbying firm, while Kalshi has seven, including its in-house operation.

Scrutiny has grown this year

Lawmakers and regulators have taken a closer look at prediction markets after trades tied to U.S. military actions in Venezuela and Iran raised insider-trading concerns, CNBC reported. The Wall Street Journal also reported last week on betting that may have involved inside political information.

In another case, a teleprompter operator for President Donald Trump was suspended after it was disclosed that he was under investigation for using material, nonpublic information to trade on Kalshi, according to CNBC. Material, nonpublic information means important information that has not been made available to the public.

Kalshi and Polymarket have said they have taken steps to prevent insider trading on their platforms, CNBC reported. Lawmakers have also raised concerns about contracts tied to sports, elections and government actions.

Kalshi has added former Biden and Obama administration officials to its government relations effort and has Donald Trump Jr. as a paid advisor, according to CNBC. CEO Tarek Mansour recently appeared at the Capitol with Rep. Josh Gottheimer, D-N.J., to support legislation aimed at protecting children from online gambling.

Patrick McHenry, a former Republican congressman and senior advisor to the Coalition for Prediction Markets, told CNBC that casinos have had a head start in Washington and in state capitals. “So much of the existing infrastructure of engagement on the Hill and at the states has been by the casino industry,” McHenry said. He added that prediction markets are “a new entrant into the policy debate in Washington.” Kalshi declined to comment to CNBC and referred questions to McHenry.

The CFTC remains central

Prediction market companies argue that sports event contracts are swaps, meaning financial contracts whose value is tied to an underlying event or asset, similar to contracts linked to gold or corn. On that view, the Commodity Futures Trading Commission should oversee them. Critics say sports contracts are sports betting, which is usually regulated by states.

At a House Agriculture subcommittee hearing Tuesday, Rep. Dusty Johnson, R-S.D., said the products look like sports betting to many Americans and like an innovative financial product to others. He also said the CFTC is not a gambling regulator.

Broad prediction-market legislation is considered unlikely before the November elections, CNBC reported, though companies are watching for narrower language that could be added to a larger bill. TD Cowen policy analyst Jaret Seiberg told CNBC that the CFTC, which released a proposed prediction-market rule in June and is taking public comments, remains the main focus.

“If you’re these companies, you really don’t want Congress to do anything,” Seiberg said. “And right now, Congress isn’t doing anything. So they seem to be on the winning side of this lobbying fight.”

House Oversight and Reform Committee Chairman James Comer, R-Ky., is also investigating insider-trading controls at prediction market platforms, according to CNBC. A person familiar with the committee’s work told CNBC that Kalshi’s recent briefing was well received, while Polymarket faced more scrutiny after sending outside counsel instead of company representatives. A Polymarket spokesperson told CNBC the choice came from a misunderstanding and said the company remains committed to collaboration and transparency with the committee.

CNBC disclosed that it has a commercial relationship with Kalshi that includes customer acquisition and a minority investment.

This story draws on original reporting from CNBC.