The chairman of the House Oversight Committee launched an investigation into possible insider trading on Kalshi and Polymarket, two increasingly popular prediction market platforms.
Republican Rep. James Comer of Kentucky sent letters to each of the companies’ CEOs on Friday requesting documents and information about how they verify the identity of users and flag suspicious activity, such as a trade being made hours before major government actions.
“It’s the Wild West,” Comer told CNBC of the prediction markets on Friday. “There are no rules. You and I may think we know what’s ethical and what’s not, but there’s no written law against it. This is so new and it’s never been a problem until a few months ago.”
He referenced Gannon Ken Van Dyke, a special forces soldier who participated in the U.S. raid that captured Venezuelan President Nicolás Maduro and now faces charges stemming from a $400,000 profit that prosecutors say he made after betting on military action in Venezuela.
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Stock trading — and holding stocks in companies that could conflict with lawmakers’ committee assignments — is a much-discussed issue in Congress. Recent federal disclosures show President Donald Trump bought stock this year in companies his administration regularly regulates.
But prediction markets, like cryptocurrencies and artificial intelligence, are fairly new entrants on the financial scene. And Congress has struggled to extend its oversight to the online gambling outlets.
“As a US-regulated exchange we are proud of our comprehensive protections against insider trading,” Elisabeth Diana, a spokesperson for Kalshi, wrote in a statement to NOTUS. “We look forward to engaging with the Committee and its members about the systems and processes that we have spent years building.”
A spokesperson for Polymarket provided a similar statement, saying the company looks forward to engaging with Comer and the committee “on how our platform is a pioneer in transparency.”
Transparency appears to be what Comer is seeking as his panel looks into the prediction markets.
“There’s a concern now,” Comer said, “that members of Congress, members of the president’s administration, any type of government employee could use basic insider knowledge and make huge profits on anything government-related.”
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