Prediction market, casino and gaming lobbies increase spend in 2026

A lobbying arms race is developing in Washington between Kalshi, Polymarket and the casino and gaming industries; All parties are vying to win over lawmakers amid increasing scrutiny of prediction markets by Congress and regulators.

Kalshi’s lobbying expenses totaled $990,000 in the first half of 2026, according to filings filed this week, and nearly $1.8 million when outside firms he hired are included. That’s more than the $1 million total the company has spent on lobbying through 2025 and marks the company’s highest six-month spending ever.

But the gambling and casino industry, which is struggling with the rise of prediction markets, is also spending more on Capitol Hill.

The American Gaming Association, a gambling industry group, has spent $1.39 million on lobbying so far in 2026; That’s more than what he spent in 2025. The group spent about $1.8 million on federal lobbying efforts when it included outside firms; That’s 30% more than it spent in the first half of 2025. The Cherokee Nation, which owns casinos and other gaming interests, spent $600,000 in the first half of 2025. 2026 is also ahead of 2025 spending.

A firm lobbying on behalf of Kalshi’s chief rival, Polymarket, spent $180,000 on its client in the first half of 2026; This figure is on pace to be equivalent to $360,000 spent in 2025. Polymarket’s footprint on Capitol Hill is smaller than Kalshi’s. While the first one uses only one company’s lobbying activity, the second one uses seven lobbying activities, including its own company.

Forecast markets have been mired in political controversy since the beginning of the year following a series of trades ahead of US military operations in Venezuela and Iran that raised concerns about insider trading.. Last week, The Wall Street Journal reported A teleprompter operator for President Donald Trump tipped off Kalshi about bets that may have been based on inside political information after it was announced that he was under investigation for using material, non-public information to make transactions.

While Kalshi and Polymarket say they are taking steps to eliminate insider trading on their platforms, lawmakers have also publicly expressed concerns about betting on things like sports, elections and other government actions.

Skepticism on Capitol Hill

Kalshi went on the offensive on Capitol Hill. The company has hired former Biden and Obama administration officials to help with government relations efforts and has counted Donald Trump Jr. as a paid consultant. CEO Tarek Mansour recently spoke at the Capitol alongside Democratic Rep. Josh Gottheimer (D-N.J.) in support of a bill aimed at protecting children from online gambling.

Still, prediction markets say they face an uphill battle when it comes to attracting lawmakers’ attention. That’s partly because the casino and gaming industry has an advantage, according to Patrick McHenry, a former Republican congressman who is now senior counsel for the industry group Coalition for Prediction Markets, which represents five companies, including Kalshi.

“A lot of the current attendance infrastructure on the Hill and in the states has been provided by the casino industry,” he said in an interview. “Prediction markets are a new addition to the policy debate in Washington and are making great progress in engaging with lawmakers.”

Kalshi declined to comment and approached McHenry.

Lawmakers this year introduced a series of bills to address insider trading in prediction markets and restrict event contracts on topics such as sports, elections and acts of war. The largest segment on the platforms is sports contracts.

Prediction markets defend those related to sports Event contracts are swaps, similar to financial market swaps such as gold or corn contracts, and therefore must continue to be regulated by the Commodity Futures Trading Commission. Critics of the companies’ sports offerings argue that these markets often amount to sports betting regulated by governments.

That tone was echoed by senators at a commerce committee hearing in May; A bipartisan chorus said these contracts were nothing more than a gamble. At a Tuesday hearing on sports-related event contracts hosted by the House Agriculture Committee subpanel, Rep. Dusty Johnson, R.S.D., struck a more conciliatory tone.

“To many Americans, these products are very similar to sports betting. For others, they are an innovative financial product that can help aggregate information and provide insights into future events,” he said. “Drawing that line and determining whether our laws and regulators are equipped to do so is the central question before us today.” But he added that the CFTC is not a gambling regulator.

Legislation unlikely to be introduced in 2026

Prediction markets legislation is unlikely to be introduced this year as Congress gears up toward the November election, but companies are eyeing the possibility that a small proposal could be included in a broader legislative package before the end of the year.

TD Cowen policy analyst Jaret Seiberg said all eyes are on the CFTC, the federal regulator for event contract exchanges. The CFTC released its proposed rule for prediction markets in June and is currently in a public comment period on that initial draft.

As prediction markets face harsh rhetoric from lawmakers, Seiberg said lack of legislative action is exactly what the platforms want.

“If you’re these companies, you really don’t want Congress to do anything,” he said. “And right now Congress is doing nothing. So they appear to be on the winning side of this lobbying battle.”

Prediction markets also remain under scrutiny for efforts to police insider trading following an investigation launched by House Oversight and Reform Committee Chairman James Comer, R-Ky.

But a person familiar with the committee’s investigation said the two platforms received different reactions when they briefed the committee recently. The person who asked for details of the investigation to be released said Kalshi’s briefing was well received. Polymarket comes under increased scrutiny because the company chose to send outside consultants to the briefing instead of company representatives.

A spokesperson for Polymarket said the decision was due to a misunderstanding and that the company was keen to move forward after the incident. The spokesperson added that the company “remains committed to continued cooperation and transparency” with the committee.

A person familiar with the committee’s investigation said Kalshi was preparing to tell the committee this week that Trump’s former teleprompter operator was trading in “mention markets” — contracts where speculators trade on whether a person will say a particular word at an event or speech — using material, nonpublic information on the platform. The company is expected to explain how its policies caught Gabriel Perez making these transactions, said the person.

Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investment.