WASHINGTON – Prediction market platforms like Kalshi and Polymarket are facing mounting pressure in Congress as lawmakers debate whether the platforms should be treated as financial exchanges or gambling operations.
The platforms allow users to bet on real-world events from sports to politics, which are classified as a type of financial derivative overseen by the United States Commodity Futures Trading Commission.
But the rapidly growing industry has become a pressing topic on Capitol Hill following a slew of recent scandals, with seven House Democrats urging the House Oversight Committee last week to subpoena prediction markets over concerns of corruption and insider trading.
Last month, U.S. Army soldier Gannon Van Dyke was charged with using classified information to profit from a Polymarket wager related to the capture of Venezuelan President Nicolas Maduro in January. In the same month, Kalshi fined and suspended three congressional candidates for betting on the outcomes of their own elections.
“Every day, every week, we seem to see a new story, whether it's campaign staffers with internal access to polling betting on things,” said Senator Adam Schiff, D-Calif, at a panel hosted by the Brookings Institution on Monday. “The real winners seem to be these professional market makers, where just about everybody else seems to be losing money.”
There are currently 14 active bills related to prediction markets in Congress, including the Prediction Markets are Gambling Act. The bipartisan bill would amend the Commodity Exchange Act to ban prediction markets from listing contracts that resemble sports bets or casino-style games.
Schiff, one of the bill’s authors, argued that sports betting-related contracts listed on prediction markets constituted gambling and should therefore be regulated by individual states.
He added that he was also concerned about seeing a potential rise in gambling addictions in young people who use prediction market platforms to make bets.
“If you want to game on your phone at age 18 – and maybe even if you’re not 18 – you find a workaround,” Schiff said. “It's just at your fingertips, and you can now link other financial accounts to your prediction account and transfer money easily. Who's guarding against that, and who's looking into what's happening with gambling addiction?”
On prediction market platforms, users can bet on anything from the weather to the number of posts Trump uploads to TruthSocial in a given week. A Harris Poll survey conducted in March on behalf of the National Council on Problem Gambling found that 30% of Americans considered prediction markets similar to gambling, compared with 24% who saw them as financial forecasting and 18% who saw them as a form of investing.
But Kalshi’s general counsel and chief regulatory officer, Rick Heaslip, pushed back against the characterization of the platform as an avenue for 24/7 online gambling, arguing it was a tool people could use to hedge risk. He added that 70% of Kalshi users did not trade on the platform, but used it simply to interpret the news.
“They'll go on Kalshi, they'll check the odds, and they'll say, ‘Was that talking head that I just saw on CNN telling the truth? Were they giving me a real, accurate assessment of what may or may not happen?’ And so Kalshi, as an enterprise, provides that for everybody,” he said.
Heaslip noted that Kalshi has a process for deciding which markets to list and explained that the platform only lists “swaps,” which are events associated with potential economic outcomes.
He pointed to the Met Gala as a recent example, saying that a contract on whether or not a celebrity will wear a certain brand is considered a swap because it carries economic consequences.
“While if I listed a swap on whether or not my neighbor wore a red hat or blue hat tomorrow, that would probably get me into hot water with the FTC very quickly,” he said.
But other panelists questioned the inclusion of sports-related bets, which seemingly lack economic consequences, unlike those concerning the performance of individual athletes.
Sam Henry Lazarus, a research associate at the Council on Foreign Relations, said that while he thinks prediction markets have the potential to become important indicators, their inclusion made the platform resemble casino-style gaming.
“They have a ton of social utility, but they have that utility insofar as they're not running sort of a silly race,” he said. “Even if, under the law, you can make the argument that you're not a casino… if it quacks like a casino, and it walks like a casino, it's a casino. And eventually, people are going to vote representatives into office that are going to regulate you like one.”
Erika Tulfo is a reporter covering business and financial policy for Medill News Service.
President Donald Trump says Americans’ financial struggles matter “not even a little bit” as inflation rises, gas prices surge, and a controversial $1.7 billion taxpayer-funded compensation plan for political allies emerges.
Trump Says Americans’ Pain ‘Doesn’t Matter’ as $1.7B Aids His Allies
Perhaps the most effective ad in the 2024 campaign was “Kamala is for they/them. President Trump is for you.” Since that ad ran, the American people have learned that it is anything but true.
With gas prices having surged 28% in two months, inflation climbing to a three-year high of 3.8%, and the average family is spending an estimated $5,000 more this year than last due to rising costs across the board, a reporter asked Trump a simple question: To what extent are Americans’ financial situations motivating him to reach a deal to end the war in Iran?
Trump's answer was startling in its candor.
“Not even a little bit,” the President said. “The only thing that matters when I'm talking about Iran — they can't have a nuclear weapon. I don't think about Americans' financial situation. I don't think about anybody.”
But perhaps the most clarifying lens through which to view those words is what emerged just days later: Trump was suing the Internal Revenue Service (IRS) for $10 billion in damages over an IRS contractor’s leak of his tax returns but is now expected to drop that $10 billion lawsuit, not because justice has been served, but in exchange for the creation of a $1.7 billion fund to compensate his political allies.
The money would come not from any congressional appropriation but from the Treasury Department's Judgment Fund, a public fund funded by taxpayers that exists to pay legitimate court judgments against the federal government.
Under the proposed terms, a five-member commission with total authority to disburse that $1.7 billion would operate with no obligation to disclose its procedures or decision-making. Trump himself would retain the power to remove commission members without cause.
The beneficiaries? Among them: the nearly 1,600 individuals charged in connection with the January 6 Capitol attack, some of whom pleaded guilty, and people Trump already pardoned upon returning to office, as well as allies who claim they were targets of “weaponization” of the legal system under former President Joe Biden. Entities associated with Trump himself are not explicitly barred from filing claims.
The contrast here is not subtle. When asked directly whether the financial pain of working Americans factors into his decision-making, the president answers “not even a little bit.”
Yet within the same week, a deal surfaces in which $1.7 billion in public funds could flow to Trump allies, Proud Boys, Oath Keepers, and potentially Trump-linked entities — all under a commission the president controls, with no transparency requirements.
While ordinary Americans are losing ground financially, the president himself is doing remarkably well — and the numbers are staggering.
According to Forbes, Trump's net worth jumped from roughly $2.3 billion when he returned to the White House in January 2025 to an estimated $6.3 billion by April 2026 — nearly tripling his fortune in little over a year.
A New York Times investigation found that he personally gained approximately $1.4 billion in 2025 alone, a single-year increase that approaches the combined net worth of every other U.S. president while in office throughout American history.
The primary engine of that growth has not been real estate, the business that built his brand over five decades, but rather cryptocurrency ventures, meme coins, and media deals, all industries he has simultaneously deregulated from the Oval Office.
The American people are not the constituency this president governs for. The data bears that out. Real wages are losing ground as energy costs surge. The personal savings rate has dropped to 4%. Small businesses have shed hundreds of thousands of jobs under the weight of tariffs. Gas sits at over $4 a gallon. And the president's answer to the question of whether your financial pain is even in his mind is: no.
There is, of course, an argument to be made that preventing Iran from acquiring a nuclear weapon is a legitimate and serious national security priority that may justify some economic disruption.
But that argument is entirely separate from whether a president should care about the daily financial suffering of the people he was elected to serve. One can hold two things in mind at once. Trump apparently cannot — or will not.
We clearly have a portrait of a president whose conception of governance begins and ends with him and his loyalists. And when ordinary Americans ask if their struggles even register, they get the most honest answer this administration has offered: not even a little bit.
Lynn Schmidt is a columnist and Editorial Board member with the St. Louis Post-Dispatch. She holds a master's of science in political science as well as a bachelor's of science in nursing.