Kalshi and Polymarket face scrutiny as drug, TV, and political betting expands
Kalshi and Polymarket face widening scrutiny over expanding contract types and trading growth. Kalshi now offers wagers on cancer drug trial outcomes, while prediction markets have reached $24 billion in monthly trading volume. The platforms draw attention for drug approval markets, reality TV betting, and political volume dominance. Washington staffers with non-public information are trading on the platforms, and gaming officials expressed skepticism at a Saratoga conference. Bloomberg and Reuters have examined regulatory questions and potential transaction taxes.
Kalshi's cancer drug trial contracts push prediction markets into medical research integrity risk. Researchers and trial sponsors now face the possibility that traders with asymmetric information, or even fake data, will move contract prices and distort public confidence in trial outcomes. The CFTC has no specialized framework for clinical-event contracts, so the agency must either shoehorn them into existing derivative rules or watch states ban them as gambling.
Polymarket's parallel growth into political volume dominance means both platforms are expanding faster than their regulatory scaffolding. Each new contract type invites a fresh front of opposition, from the FDA to state attorneys general to Congress, and platforms are betting they can outrun the backlash.
Kalshi joins Polymarket in facing state gambling enforcement that has already pierced federal preemption in Wisconsin, New York, and Utah, with Baltimore now suing distribution partners to deepen platform liability.