The US House Oversight Committee is planning an investigation into the biggest prediction market platforms over suspicions that government employees could exploit classified information for personal gain.
Rep. James Comer, R-Ky., chairman of the House Oversight and Government Reform Committee, is seizing the internal records of the CEOs of Polymarket and Kalshi to determine whether government employees are using insider knowledge to benefit politics and geopolitical and military operations, he said on CNBC’s Squawk Box Friday.
“There’s a concern now that members of Congress, members of the president’s administration, any kind of government employee, can use basic insider knowledge and make huge profits on anything government-related,” Comer told CNBC.
“So we want to start an investigation not only to see how widespread this has been so far, but also to prove a case that we need to pass some kind of legislation,” Comer added. “And I don’t think it would be asking too much to say that members of Congress can’t participate in the prediction market, and neither can government employees or people in the president’s administration.”
Comer’s investigation is the latest in a series of attempts by Congress to investigate prediction markets and crack down on insider trading.
In letters sent Friday to Polymarket’s Shayne Coplan and Kalshi’s Tarek Mansour, Comer demanded clarity on how the platforms handle identity verification, enforce geographic restrictions and flag abnormal trading activity.
Prediction markets, which have grown in popularity in recent years, have drawn scrutiny from federal and state lawmakers and regulators, who worry that the platforms are ripe for exploitation by bad actors with national security clearances.
Prediction market volume could top around $1 trillion by 2030 as the sector evolves from niche betting into broad-based “information markets” spanning sports, crypto, politics and economics, according to a Wall Street brokerage Bernstein report in April. Amounts hit $51 billion last year and could reach around $240 billion by 2026.
The House investigation follows a heated hearing in the US Senate Commerce Committee on Wednesday, where lawmakers from both parties scrutinized prediction market platforms such as Kalshi and Crypto.com. Senate Commerce Chairman Ted Cruz (R-Texas) blasted the industry for enabling cheating scandals across major sports leagues, warning that the opportunity to profit from event contracts tempts athletes and officials to manipulate results. Meanwhile, Sen. John Hickenlooper (D-Colo.) accused the companies’ aggressive social media marketing of “preying on our youth” and promoting problem gambling.
Nicolas Vaiman, co-founder and CEO of onchain intelligence layer Bubblemaps, expressed deep concern about the national security implications of a new wave of insider trading in an interview with CoinDesk.
He warned that if those who observe the predictions can spot irregular trades, so can enemies of the United States. He and his team found 80 bets on Polymarket with a 98% win rate, which he said is statistically impossible to achieve. “Not even luck can explain these victories.”
