House Oversight Committee Chair James Comer (R-Ky.) has opened an investigation into prediction market platforms Kalshi and Polymarket, probing whether users are leveraging nonpublic or classified information to engage in insider trading. The inquiry, announced Friday, targets how these online betting sites monitor and prevent illicit activity.
Comer sent letters to Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, requesting internal records on identity verification, flagging of suspicious trades, and restrictions on access to offshore markets. “We are examining the adequacy of company safeguards to prevent access to offshore sites to circumvent compliance with applicable U.S. federal regulations governing prediction market platforms,” Comer said in a statement.
The platforms allow users to place wagers on future events, from sports outcomes and election results to weather forecasts. But recent attention has focused on unusual betting patterns tied to sensitive geopolitical developments, raising alarms about potential insider trading. Reports indicate that nine Polymarket accounts collectively earned $2.4 million betting on U.S. military involvement in Iran. In a separate case, a U.S. Army soldier involved in the capture of Venezuelan President Nicolás Maduro was arrested in April on allegations he made $400,000 on Polymarket using confidential information.
Kalshi also faced scrutiny after suspending three congressional candidates in April for betting on their own races. Lawmakers from both parties have been pressing for more transparency on how these platforms screen for and prevent insider trading, as users have generated billions in bets. Comer warned that “this growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary.”
Kalshi spokesperson Elisabeth Diana defended the company’s compliance efforts, stating the platform is “proud of our comprehensive protections against insider trading.” She added, “We look forward to engaging with the Committee and its members about the systems and processes that we have spent years building.”
A Polymarket spokesperson echoed that sentiment, saying, “Polymarket maintains a comprehensive market integrity framework. We look forward to engaging with Chairman Comer and the committee on how our platform is a pioneer in transparency.”
The investigation adds to a broader bipartisan push to regulate prediction markets. A new anti-Kalshi group has launched a D.C. ad blitz ahead of an upcoming Senate hearing, and Congress is also targeting these platforms over youth gambling risks. Comer’s probe signals that the issue is gaining traction as a potential legislative priority.
