House Oversight probes Polymarket, Kalshi over insider trading fears
In brief
- Rep. Comer demands records from Polymarket and Kalshi over insider trading risks
- Senate hearing exposed cheating risks and aggressive youth-targeting marketing tactics
- Prediction market volumes reached $51 billion in 2025, projected to hit $240 billion by 2026
The Demand for Records
Rep. Comer, R-Ky., chair of the House Oversight and Government Reform Committee, is demanding clarity on how the platforms handle identity verification, enforce geographic restrictions, and flag anomalous trading activity. His letters target Polymarket CEO Shayne Coplan and Kalshi's Tarek Mansour directly.
Comer stated his investigation aims to determine how widespread insider trading on prediction markets has been and to develop legislation restricting participation. He's proposing that members of Congress, government employees, and people in the president's administration be barred from using these platforms entirely.
"There's a concern now that members of Congress, members of the president's administration, any type of government employee, can use basic insider knowledge and make huge profits on anything government-related," Comer said.
Suspicious Trading Patterns Emerge
Nicolas Vaiman, co-founder and CEO of Bubblemaps, presented data suggesting something's amiss. His team found 80 bets on Polymarket with a 98% win rate, which he said is statistically impossible to achieve. Vaiman warned that if observers can spot irregular trades on prediction markets, so can enemies of the United States.
The House probe follows a heated Senate Commerce Committee hearing on Wednesday, where lawmakers from both parties scrutinized the prediction market industry. Senate Commerce Chair Ted Cruz blasted the platforms for enabling cheating scandals across major sports leagues, while Senator John Hickenlooper accused the firms of aggressive social media marketing that preys on young people and fosters problem gambling.
A Rapidly Growing Market
Prediction market volumes hit $51 billion last year and could reach about $240 billion in 2026, according to a Bernstein report. The sector's growth trajectory is steep. Volumes could peak to roughly $1 trillion by 2030 as the sector evolves from niche wagering into broad-based information markets.
That explosive growth has attracted regulatory attention at the highest levels. Comer's investigation reflects broader congressional concern that prediction markets, while gaining mainstream adoption, lack adequate safeguards against misuse by insiders with access to non-public information.