Betting operators and prediction markets spent record amounts on lobbying and campaign donations
Betting operators and prediction markets spent record amounts on federal lobbying during the third quarter of 2026 as Congress weighs legislation that would clarify the legal status of event contracts and sports betting markets. Traditional gambling operators are also pouring money into campaign donations and lobbying to win back bettors and gambling dollars that prediction-market platforms have lured away, according to a Semafor report published Friday.
The spending arms race reveals how deeply regulatory uncertainty is now shaping operator strategy. Traditional gambling companies face real competitive pressure from prediction-market platforms, and both sides are buying influence to secure their preferred federal framework. Kalshi, Polymarket and rivals already face active state suits in Ohio, Tennessee, Utah and Missouri. A federal statute endorsing state jurisdiction would gut the CFTC preemption defense they have built national rollouts around.
Each new state suit multiplies legal bills and forces platforms toward expensive geofences or product pullbacks. The Cruz bill would hand state attorneys general the federal blessing they need to keep suing. Meanwhile, the CFTC's swaps-label proposal moves on a slower clock than state courts. Operators must now fund three-front legal spend: federal rule comments, state court defense, and possible product redesign. The CFTC's twin proposals to classify event contracts as swaps offer one path to stronger preemption, but rulemaking stretches across months while state courts move in weeks.