U.S. lawmakers have officially launched an investigation into prediction market platforms Polymarket and Kalshi over concerns that government insiders could be using non-public information to profit from bets tied to elections, wars, and major political events. The probe comes as prediction markets rapidly grow in popularity across crypto and retail trading.
In a recent press release, House Oversight Committee Chair James Comer confirmed that the committee is investigating whether government insiders could be using non-public information to profit from prediction markets.
Comer sent formal letters to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour requesting detailed information about how the platforms monitor suspicious activity and prevent insider trading.
The committee specifically asked how the companies verify user identities, enforce geographic restrictions, and detect unusual trading patterns. Lawmakers also requested records explaining how the platforms handle domestic and international users. The companies were asked to respond by June 5.
According to Comer, internal trading records may be the only way to identify whether government officials or insiders have used confidential information to place profitable bets.
Platforms like Polymarket and Kalshi allow users to trade on the outcome of future events ranging from elections and sports to interest rates, wars, and political decisions.
The sector exploded in popularity during recent U.S. elections and major geopolitical events, with millions of dollars flowing into high-profile prediction contracts. However, that rapid growth has also raised concerns among regulators and lawmakers.
Comer warned that members of Congress, government employees, or officials connected to the presidential administration could potentially use insider information unavailable to the public.
He said lawmakers are now exploring whether new legislation may be needed to limit or completely ban government officials from participating in prediction markets.
The latest investigation adds another layer of pressure to an industry already facing growing regulatory attention. Prediction markets operate in a complicated legal area involving gambling laws, financial regulations, commodities oversight, and crypto trading rules.
At the same time, supporters argue prediction markets provide valuable public forecasting data and market-based insights around major events.
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