Bipartisan lawmakers flag insider trading and election security risks in prediction markets
Lawmakers from both parties are raising concerns about political event contracts and the potential for insider trading as the 2026 midterms approach. The concerns center on election security risks from cash betting on election outcomes and the possibility that nonpublic information could distort market prices. Senators Warren and Curtis have already demanded internal trading data from Polymarket and Kalshi under a bipartisan deadline, expanding oversight beyond a single platform.
Polymarket and Kalshi now face pressure from both Congress and federal regulators to prove their surveillance systems catch bad actors before outsiders do. The Pentagon has already banned troops from feeding nonpublic military information to prediction markets, and state attorneys general in Ohio and Tennessee have stripped Kalshi's federal preemption shield.
Any gap between what platforms detect internally and what they report to the CFTC will feed directly into parallel House and Senate oversight tracks. A second high-profile insider-trading lapse would strengthen bipartisan calls for mandatory surveillance legislation that every competitor would need to fund. The first exchange to fail this credibility test will set the compliance template the rest must race to meet.
Joins a running set of three congressional and regulatory fronts now pressing Polymarket and Kalshi on election contract integrity, after separate CFTC rulemaking and state preemption challenges this week.