Prediction markets and their opponents are spending more to influence Congress in 2026

• Kalshi's total lobbying spending including outside firms reached nearly $1.8 million in H1 2026, while the American Gaming Association spent a similar amount, up 30% from the same period in 2025
• Prediction markets face controversy over insider trading concerns, including trades made ahead of U.S. military actions and bets allegedly based on nonpublic political information
• Legislation is unlikely in 2026 despite bipartisan concerns, with the key regulatory focus remaining on the CFTC's proposed rule for prediction markets currently in public comment period

Summary: Prediction Markets vs. Gaming Industry Lobbying Battle Intensifies in 2026

Key Developments:

A lobbying arms race is escalating in Washington as prediction market platforms and traditional gaming interests compete for Congressional influence amid heightened regulatory scrutiny.

Spending Figures:

• Kalshi (largest U.S. prediction market): Spent $990,000 directly on lobbying in H1 2026, approaching its entire 2025 total of $1 million. Including outside firms, spending reached nearly $1.8 million.
• American Gaming Association (gambling industry group): Spent $1.39 million in H1 2026, with total expenditures including outside firms at $1.8 million—30% more than H1 2025.
• Cherokee Nation (casino/gaming interests): $600,000 in H1 2026, exceeding its 2025 pace.
• Polymarket (Kalshi's rival): Spent $180,000 via one lobbying firm, on track to match 2025's $360,000. Smaller Capitol Hill footprint than Kalshi's seven firms.

Regulatory Concerns:

Prediction markets face controversy over suspicious trades ahead of U.S. military actions in Venezuela and Iran, raising insider trading concerns. A Trump advisor was suspended from Kalshi for allegedly trading on nonpublic information. Lawmakers have expressed concern about betting on sensitive topics and are debating whether sports-related contracts constitute financial swaps or gambling.

Legislative Outlook:

Multiple bills introduced in 2026 address insider trading on prediction markets and seek restrictions on certain event contracts. However, legislation is unlikely before November elections. The CFTC released proposed rules in June and is accepting public comments.

Market Implications:

Analysts suggest inaction from Congress favors prediction markets. The industry hired former government officials and advisors to strengthen lobbying efforts, though traditional gaming interests maintain an established Capitol Hill advantage.