Democrats Plan to Strengthen Regulation of Prediction Markets; Kalshi and Polymarket May Face Congressional Investigations

on Nov. 9, according to POLITICO, as Democrats secured victory in the U.S. midterm elections, prediction market platforms such as Kalshi and Polymarket may face stricter congressional oversight. Democratic Senator Jeff Merkley has called for restricting prediction market contracts involving events like elections, wars, assassinations, and terrorism, and is advancing related legislation.

Representative Maxine Waters also pledged to strengthen regulation of prediction market platforms, while Senator Elizabeth Warren previously questioned the legality and regulatory mechanisms for election contracts on these platforms. Future scrutiny may focus on insider trading, market manipulation, and compliance with state gambling regulations.

Kalshi stated that more than ten investigations involving election-related trades are currently underway, while Polymarket expressed willingness to collaborate with bipartisan lawmakers to establish regulatory guidelines.