Democrats Move to Curb Kalshi, Polymarket

Congressional Democrats and some Republicans want tighter limits on prediction market platforms after federal regulators loosened rules on election and sports wagers.

Updated on Nov. 9, 2026 in Gambling

Isometric editorial illustration of a steel gate partly open across a stone threshold, with stacked cubes at its base, in muted oxblood, teal, and mustard. — The CFTC loosened rules letting Kalshi and Polymarket offer election and sports wagers, prompting Congressional Democrats to push for tighter federal limits. AI Illustration. Upload story photo >

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Should prediction market platforms like Kalshi and Polymarket face stricter federal regulation?

Democrats seek to crack down on prediction market platforms Kalshi and Polymarket after CFTC Chairman Michael Selig loosened rules to allow wagers on elections and sports. The CFTC has asserted exclusive federal authority, superseding state laws that restrict gambling.

Why it matters

Critics argue there is virtually no distinction between Kalshi or Polymarket and traditional online gambling platforms, and say the markets create potential for abuse and insider trading. The fight determines whether state gambling laws or federal commodities oversight governs a fast-growing betting market.

The CFTC claims exclusive federal authority over prediction market platforms, superseding state laws restricting gambling. Kalshi allows users to trade contracts against each other and takes a fee, while sportsbooks and casinos set odds and bet against gamblers.

The players

Kalshi

A U.S. prediction market platform that lets users trade event contracts against each other and charges a fee on trades.

Polymarket

A prediction market platform that allows users to wager on the outcomes of elections, sports and other events.

Maxine Waters

A long-serving Democratic congresswoman from California who chairs a prominent House financial services panel and has sought to curb predatory lending.

Elizabeth Warren

A Democratic senator from Massachusetts known for consumer-finance advocacy and oversight of financial regulators.

Ted Cruz

A Republican senator from Texas who has reportedly planned legislation to require state or tribal approval before prediction markets offer sports contracts.

The details

Democrats now control Congress, and some members of both the House and Senate want to crack down on prediction markets. Kalshi's CEO Tarek Mansour argued in October in a Wall Street Journal op-ed that betting on the Milwaukee Brewers was not gambling, while Trump described the CFTC's intervention as the "Gold Standard" to block state-level regulations.

May: Trump said prediction markets would "thrive" under his presidency.
October: Kalshi's CEO argued in a Wall Street Journal op-ed that Brewers betting is not gambling.
Nov. 6: Rep. Maxine Waters said she intends to curb predatory lending and platforms, including prediction markets.
Lead-up to the midterm elections: Elizabeth Warren and John Curtis wrote to Kalshi and Polymarket CEOs about election-related contracts.

Legal Context

The dispute centers on whether the Commodity Futures Trading Commission can preempt state gambling laws for event contracts. The outcome will shape how prediction markets compete with traditional sportsbooks and casinos regulated state by state.

Users who trade on Kalshi or Polymarket may face changing availability of election and sports contracts depending on how courts and Congress resolve state and federal authority. Bettors should watch whether state regulators or federal law determines which platforms remain legally accessible.

The takeaway

Prediction markets sit between financial trading and gambling, and their legal status depends on which regulator wins the jurisdictional fight. Readers placing event bets should check their state's rules before participating.