Prediction Market Giants Kalshi and Polymarket Battle for Washington Influence Amid Regulatory Push

Kalshi and Polymarket, the dominant forces in the rapidly growing prediction market industry, are aggressively vying for political favor in Washington D.C. as Congress weighs new restrictive legislation. The surge in popularity of event contracts—which allow users to bet on everything from sports to elections—has drawn the attention of regulators and lawmakers concerned about market integrity. Kalshi, which holds approximately 90% of the U.S. market share according to a Bank of America report, has launched a high-profile ad campaign to differentiate itself from its global competitor, Polymarket. The campaign emphasizes Kalshi's adherence to U.S. law and its bans on insider trading and 'death markets.' The regulatory friction centers on the potential for exploitation. For instance, a Polymarket user reportedly earned $400,000 by predicting the ouster of Venezuelan President Nicolás Maduro, sparking insider trading alarms. Senator Jeff Merkley has introduced multiple bills to curb these platforms, arguing that bets on government actions and wars pose a danger to democracy. To counter this, Kalshi has expanded its government relations team, hiring former Biden administration official John Bivona and policy advisor Stephanie Cutter. In 2025, Kalshi spent $615,000 on lobbying, while Polymarket spent $360,000. While facing pressure from state-level cease-and-desist orders and opposition from traditional sportsbooks, Kalshi recently secured a victory in a federal appeals court against New Jersey's attempts to limit its operations. The outcome of the current legislative push will determine whether these platforms can continue to scale within the U.S. legal framework.