Kalshi and Polymarket.
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A lobbying arms race between Kalshi, Polymarket and the casino and gaming sectors is unfolding in Washington, with all sides vying to win over lawmakers amid increasing scrutiny of prediction markets from Congress and regulators.
According to this week’s filing, Kalshi’s lobbying spending during the first half of 2026 totaled $990,000, and nearly $1.8 million including outside firms. This exceeds the total $1 million the company spent on lobbying throughout 2025 and is the highest six-month expenditure the company has ever seen.
But the gambling and casino industry, which is fighting the rise of prediction markets, is also spending more on Capitol Hill.
The American Gaming Association, a gambling industry group, has spent $1.39 million so far in 2026 on lobbying efforts, which is ahead of what it will spend in 2025. Including outside firms, the group has spent about $1.8 million on federal lobbying, 30% more than it spent in the first half of 2025. The Cherokee Nation – which has a casino and other gaming interests – has spent $600,000 in the first half of 2026, even surpassing its 2025 spending.
Kalshi’s main rival, a lobbying firm on behalf of Polymarket, has spent $180,000 on its clients in the first half of 2026, a figure that puts it on pace to match the $360,000 it spent in 2025. Polymarket’s footprint on Capitol Hill is smaller than Kalshi’s. The former uses only one lobbying firm, while the latter uses seven, including its in-house firm.
The prediction market has been mired in political controversy since the beginning of the year, after a series of trades preceded US military actions in Venezuela and Iran, which raised concerns about insider trading.. In the last week, The Wall Street Journal reported Regarding betting that may have been based on inside political information, a teleprompter operator for President Donald Trump was suspended after it was revealed that he was being investigated for using material, non-public information to trade on Kalshi.
While both Kalshi and Polymarket say they have taken steps to root out insider trading on their platforms, lawmakers have also publicly expressed concerns about bets placed on things like sports, elections and other government actions.
Doubt on Capitol Hill
Kalshi has attacked Capitol Hill. The company has hired former Biden and Obama administration officials to aid its government relations efforts and counts Donald Trump Jr. as a paid consultant. CEO Tarek Mansour recently joined Democratic Representative Josh Gottheimer, D-N.J., in support of a bill aimed at protecting children from online gambling. Spoke with at the Capitol.
Still, prediction markets say they face an uphill battle when it comes to getting lawmakers’ attention. This is partly due to the fact that the casino and gambling industry is off to a good start, according to former Republican Congressman Patrick McHenry, who is now senior advisor to the industry group Coalition for Prediction Markets – which represents five companies including Kalashi.
“Much of the existing connectivity infrastructure in the hills and states has been built by the casino industry,” he said in an interview. “Prediction markets are a new entrant into the policy debate in Washington, and are making great strides in communicating with lawmakers.”
Kalshi declined to comment, deferring to McHenry.
Lawmakers have introduced a flurry of bills this year to address insider trading on prediction markets and to restrict event contracts on topics including sports, elections and acts of war. Sports contracts form the largest segment on the platforms.
Prediction markets provide logic related to those sports Event contracts are swaps, similar to financial market swaps such as gold or corn contracts, and therefore must remain regulated by the Commodity Futures Trading Commission. Critics of the companies’ sports offerings argue that these markets are directly analogous to sports betting, which is typically regulated by states.
Senators echoed that tone at a Commerce Committee hearing in May, when a bipartisan chorus said the contracts were nothing more than a gamble. At a Tuesday hearing on sports-related event contracts held by a subpanel of the House Agriculture Committee, Rep. Dusty Johnson, R-S.D. Gave a more cordial tone.
He said, “For many Americans, these products look like sports betting. For others, they are an innovative financial product that can help collect information and provide insight into future events.” “Drawing that line and determining whether our laws and regulators are equipped to do that is the central driving question facing us today.” However, he added that the CFTC is not a gambling regulator.
No law likely to be enacted in 2026
Market legislation is unlikely to be predicted this year as Congress heads toward the November elections, but companies are eyeing the possibility that a smaller proposal could be included in a broader legislative package before the end of the year.
TD Cowen policy analyst Jarrett Seiberg said all eyes are on the CFTC, the federal regulator for event contract exchanges. The CFTC released its proposed rule for prediction markets in June and is currently in the public comment period regarding that first draft.
And while prediction markets are facing tough rhetoric from lawmakers, Seeberg said the lack of legislative action is exactly what the platforms want.
“If you’re these companies, you really don’t want Congress to do anything,” he said. “And right now, Congress is doing nothing. So they seem to be on the winning side in this lobbying battle.”
Prediction markets are also under scrutiny for efforts to police insider trading, following an investigation launched by House Oversight and Reform Committee Chairman James Comer, R-Ky.
But a person familiar with the committee’s investigation said the reception to the two platforms was varied when they recently briefed the committee. The person, who requested anonymity to disclose details about the investigation, said Kalshi’s briefing was well received. Polymarket investigates more Because the company chose to send outside lawyers instead of company representatives for the briefing.
A Polymarket spokesperson said the decision stemmed from a misunderstanding and the company was eager to move on from the incident. The spokesperson said the company is “committed to continued cooperation and transparency” with the committee.
Kalshi was also set to brief the committee this week, a person familiar with the committee’s investigation said, that Trump’s former teleprompter operator traded on “mention markets” — contracts where speculators trade on whether or not someone will say a certain word at an event or speech — using material on the platform, non-public information. The company is expected to explain how its policies caught Gabriel Perez making these trades, The person said.
Disclosure: CNBC and Kalshi have a commercial relationship that includes client acquisition and minority investment.