Federal lawmakers push to stiffen regulation of prediction markets after insider military bets
Federal lawmakers are pushing to stiffen regulation of prediction markets including Polymarket and Kalshi amid concerns about insider bets on Venezuela and other military action. The proposals come as scrutiny mounts over whether traders with access to non-public information about military operations can exploit event contracts.
Congressional pressure for tighter rules could force CFTC-regulated platforms to implement surveillance or position limits on geopolitical markets, raising compliance costs and potentially restricting contract offerings.
Joins CFTC rulemaking and state-federal litigation as the fifth major regulatory front this quarter facing Kalshi and Polymarket, compounding pressure from Kentucky's tax, Rhode Island's gambling enforcement, the CFTC's contract-classification proposal, and the platform's own insider-trading surveillance rollout.