Prediction Platforms Ramp Up Lobbying Efforts as States Push to Regulate the Sector

Prediction market operators Kalshi and Polymarket are ramping up lobbying efforts and recruiting political figures from both sides of the aisle as they fight US states’ attempts to regulate sports-event contracts as gambling. Any ruling allowing state laws to apply to prediction markets could force operators to seek licenses, follow local customer-protection rules, and even cease operations in certain jurisdictions. Companies Are Hiring Former Government Officials A recent report from advocacy group Demand Progress describes a growing political influence campaign. Titled “Prediction Markets’ Bet on Influence”, it reveals a surge in Kalshi’s lobbying expenses. This coincides with the appointment of former government officials to roles connected with the industry. Kalshi reportedly spent $1.8 million on lobbying in the first half of 2026, nearly three times the $615,000 it reported for all of 2025. Amidst mounting scrutiny, the industry has built up its influence operation in Washington. Demand Progress statement Kalshi’s hires include former Obama administration official Stephanie Cutter and former Biden administration official John Bivona. The company also hired Tony Hanagan, a former senior Republican floor staffer, and Jed Bhuta, who worked for Democratic members of Congress. According to Demand Progress, Polymarket has hired David Urban, a former adviser to Donald Trump’s presidential campaign. The report also focuses on the Coalition for Prediction Markets, an industry group Demand Progress describes as a lobbying front. The coalition named former Democratic Rep. Sean Patrick Maloney its president and appointed former Republican Rep. Patrick McHenry, who led the House Financial Services Committee, as senior adviser. Donald Trump Jr. is reportedly involved with both Kalshi and Polymarket. Conflicting Court Rulings Have Caused Confusion Ella Fanger, a policy adviser for Demand Progress, criticized the companies’ efforts, arguing that state and tribal gambling laws remain a critical protection against predatory practices by operators. She noted that prediction platforms should not be able to sidestep gambling oversight, warning that the absence of state-level controls could leave consumers vulnerable to unregulated sports betting and insider trading. No matter how they choose to frame themselves, prediction markets are fundamentally gambling websites that should not be able to evade sensible regulation. Demand Progress statement Recent court decisions have emboldened states to continue their challenges. In September, the Sixth US Circuit Court of Appeals ruled that Ohio and Tennessee could treat sports event contracts as a type of gambling. In Nevada, the Ninth Circuit Court of Appeals reached a similar conclusion. However, these decisions conflict with another ruling that prevented New Jersey from regulating prediction markets. These different outcomes have left the core argument of who can regulate prediction markets unsettled. Several states have asked the US Supreme Court to intervene and deliver a definitive ruling. With the sector’s future on the line, lobbying efforts will likely continue. In the meantime, companies like Kalshi and Polymarket could face an increasingly fragmented US market.