Prediction Market Sites Are Taking Over Washington

Before White House press secretary Karoline Leavitt takes the podium for press briefings, users on Polymarket and Kalshi place their bets, hoping to cash in on their predictions about when the briefing will start, how long it will last and what Leavitt will say.

Words and phrases like “ICE,” “narco-terrorist,” “Biden,” and “radical left” are popular picks, with thousands of dollars being put up every time she takes the podium. Users have placed about $33,000 on whether the UFC will host a fight at the White House by the country’s 250th anniversary, $85,000 on what President Donald Trump will say in his State of the Union address, and $372,000 on which Cabinet secretaries will be out by the end of the year.

Earlier this month, Leavitt made headlines for ending the briefing seconds before users could cash in bets that it would last longer than 65 minutes.

There were two places in Washington where bets weren’t coming in — at least on WiFi. Polymarket and Kalshi are inaccessible on the “White House Press” WiFi network. They are also restricted on the House of Representatives’ WiFi network, although not the Senate’s.

Prediction markets have become a multi-billion-dollar industry, expanding from wagers on sports to political minutiae. As popularity surges, lawmakers and government institutions are taking steps to limit access and prevent misuse. But experts say the current attempts at regulation don’t go far enough.

Legislative efforts to regulate the integrity of the markets became a top priority for lawmakers after an anonymous user on Polymarket wagered thousands of dollars that the United States would capture Venezuelan President Nicolás Maduro, hours before it happened and hours before the public became aware of the plan. The user made more than $400,000.

The trade was something of a wake-up call for lawmakers on Capitol Hill. A group of senators wrote a letter to the chair of the Commodity Futures Trading Commission demanding a probe into the matter, which they called “suspicious.”

Democratic Rep. Ritchie Torres introduced a three-page bill to bar elected officials, congressional staffers, political appointees and agency employees from using “material nonpublic information” to purchase prediction market contracts.

The bill is a good start, but won’t fix everything, said Melinda Roth, a visiting associate professor of law at Washington and Lee University School of Law.

“It should cover more than just government officials,” Roth said. “Anybody who has material nonpublic information should be banned, and it should be enforced as to not be able to participate, because otherwise the marketplace is not very fair or transparent.”

It’s unclear how long Polymarket and Kalshi have been restricted on White House Press WiFi.

Asked for guidance on using platforms like Polymarket and Kalshi in the briefing room (where those present know before most when the briefing will begin) and executive branch offices, a White House official pointed to gambling laws in the Code of Federal Regulations.

Those rules prohibit government employees from gambling while on government property and broadly prohibit government employees from profiting from information known by virtue of their employment. There are also rules that prohibit anyone from some kinds of gambling while on government property.

But prediction markets have argued for years — and continue to argue in court — that what their sites offer isn’t gambling at all. Kalshi argues that its platform allows users to place “swaps,” not wagers, in an act that it says is “futures trading,” not gambling.

Polymarket’s CEO, meanwhile, has gone as far as to suggest that insider trading is good for the market. Kalshi’s CEO has publicly supported Torres’ legislation, and its rulebook explicitly bans insider trading.

Lobbying around the industry has only continued to grow: Kalshi announced last week that former Rep. Sean Patrick Maloney will serve as president and CEO of the Coalition for Prediction Markets, a lobbying group for the industry.

Efforts to regulate the new industry are running parallel to efforts to expand access and “normalize” prediction markets.

“I think there’s a huge future potential for prediction markets all through society, in corporations, in nonprofits, in government, in private decisions,” said Robin Hanson, an associate professor of economics at George Mason University. “There’s a huge potential for these markets to inform many valuable, important decisions, and they can, in fact, give more accurate estimates than other sources. That’s their power.”