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As prediction markets have exploded in popularity over the past two years, they have also become increasingly controversial – setting off a lobbying-fueled power struggle for regulation of the platforms.
Amid allegations of insider trading, bets on military operations, and deceptive marketing practices, some states are seeking to sue or ban prediction markets. But the federal government has taken an unusual role in the legal battle, with the Commodity Futures Trading Commission suing states that seek to enforce their gambling laws against prediction-market platforms.
Prediction market companies contend they are offering financial transactions known as swaps – which are regulated by the Commodity Futures Trading Commission, a federal agency – while many states argue they are gambling operations, akin to sportsbooks and casinos. Gambling is regulated by the states.
Several lawsuits addressing whether state law applies to prediction markets have advanced to federal courts, but because judges have split on their rulings, the question is still unsettled and moving towards the Supreme Court.
Although market leader Kalshi argues it should be regulated at the federal level, the company’s lobbying and spending demonstrates a push to gain state-level influence – especially in the states spearheading regulation.
So far in 2026, Kalshi, its competitor Polymarket and the Coalition for Prediction Markets have spent at least $3 million on lobbying and campaign contributions across the federal and state levels.
Kalshi directs political spending to governors and state AGs
State attorneys general are leading the regulatory fight against prediction markets – and the majority are united in the opinion that CFTC regulation should not preempt state gambling laws. In July, a coalition of 44 state AGs signed onto a letter to the CFTC arguing that prediction markets are a “new form of casino.”
But just as attorneys general and prediction markets appear to be battling each other, Kalshi is pouring hundreds of thousands of dollars into the two major political organizations dedicated to electing and supporting AGs.
According to IRS filings reviewed by OpenSecrets, in the first half of 2026, Kalshi gave $147,500 to the Republican Attorneys General Association and $170,000 to the Democratic Attorneys General Association.
Kalshi has also donated directly to some attorneys general – including the super PAC supporting Ken Paxton’s run for Senate in Texas and the campaigns of Vermont’s Charity Clark, Oregon’s Dan Rayfield and Florida’s James Utheimer. In response to the contributions, Rayfield and Clark told local news outlets they are not influenced by political donations. A spokesperson for Paxton’s super PAC told Politico that Paxton “has fought at every turn to hold big corporations accountable.”
The New York Times reported in August that Donald Trump Jr., who serves as a strategic advisor to Kalshi and Polymarket, told Republican state AGs not to fight prediction markets. Trump Jr.’s venture capital firm is invested in Polymarket and he has an equity stake in Kalshi.
The head of Kalshi’s state relations, Blake Bee, was previously director of the National Association of Attorneys General’s Center for Leadership Development, where he worked directly with state attorneys general.
Kalshi also donated $100,000 to the Republican Governors Association and $150,000 to the Democratic Governors Association in the first half of 2026.
“Like many U.S. regulated companies, we support candidates on both sides of the aisle,” Dani Lever, a spokesperson for Kalshi, wrote in a statement to OpenSecrets.
Kalshi hires dozens of new lobbyists, focusing on California and New York
Kalshi has ramped up state-level lobbying in the past several months. As of September, the company has at least one registered lobbyist in 41 states, nearly all of them brought on board since April.
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Kalshi appears to be spending the most on lobbying in California and New York, though many states do not require financial disclosure by lobbyists.
In California, Kalshi spent $62,000 on lobbying in the first half of 2026. Disclosure reports reviewed by OpenSecrets show that Kalshi is lobbying on three assembly bills and the “Attorney General’s and Governor’s offices re: prediction markets.”
Kalshi’s California lobbying has so far been handled by Redwood Public Affairs. Redwood’s co-founder and principal was formerly the legislative director and chief of staff for state Attorney General Rob Bonta. On Aug. 12, Kalshi registered another California-based firm, the Weideman Group, to begin lobbying.
In New York, Kalshi recently reported that it would increase its payment to lobbyists at Brown & Weinraub Advisors from $10,000 monthly to $25,000 monthly to work on legislation relating to prediction markets.
Kalshi is spreading its Empire State work around, also committing to pay $25,000 monthly to the Mirram Group in a contract running until July 2027. Additionally, Kalshi has registered Blake Bee as its in-house lobbyist in New York. Bee will lobby the office of the governor and the state assembly through December 2026, according to the registration.
Between its payments to both lobbying groups and Bee, Kalshi is currently projected to spend over $400,000 on lobbying in New York through July 2027.
Through its state-level lobbying efforts, Kalshi may be positioned to deal with a flood of new laws if the Supreme Court rules that prediction markets should be regulated by the states as gambling.
“Most state gambling laws are designed for sporting events, poker, casino games, but they mostly clearly cover gambling in whatever form or packaging,” said Benjamin Schriffin, director of securities policy at Better Markets, a nonprofit that advocates for financial reform. “I don’t think anybody ever conceived of having to pass a law that’s going to prevent people who are watching ‘Survivor ‘at home on a Wednesday night from betting on who’s going to win. So you could see states thinking, ‘We need to clarify our gambling laws for all these new ways that people have now found to gamble on prediction markets.’”
Polymarket has not yet registered any lobbyists at the state level.
Kalshi continues federal lobbying, spending nearly $1 million in the first half of 2026
As it expands its state presence, Kalshi is also continuing its federal lobbying by spending nearly $1 million through June 30.
In January, Kalshi opened a Washington, D.C., office headed by John Bivona, who served on the Joe Biden’s presidential campaign and as the Department of Homeland Security’s White House liaison during the Biden administration.
In addition to its in-house federal lobbying team, Kalshi has hired six outside firms. Kalshi relies most on Miller Strategies, which it has paid $240,000 during the first half of 2026. Miller Strategies is headed by Jeff Miller, who served as finance chair on President Donald Trump’s second inaugural committee and has grown his shop into the fifth highest-grossing lobbying firm in the first half of 2026.
Kalshi has also reported $120,000 in lobbying expenses to Lincoln Policy Group, founded by former Sen. Blanche Lincoln (D-Ark.). While in the Senate, Lincoln chaired the Agriculture, Nutrition, and Forestry Committee – the CFTC’s authorizing committee.
As a lobbyist for Kalshi, Lincoln is now arguing directly against stances she took as chair. In 2010, Lincoln said the CFTC should be empowered to “prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed ‘event contracts.’” In 2025, Lincoln submitted a public letter to the CFTC arguing that Kalshi should be permitted to offer sports bets in all states.
Kalshi has disclosed lobbying on three Senate bills – the Prediction Market Act, which would create stronger federal regulations on events contracts, the Protect College Sports Act and the National Defense Authorization Act.
The Protect College Sports Act would create federal rules around athlete payment, transfers and conference alignment. Although lobbying disclosures do not specify Kalshi’s stance in its lobbying, the NCAA, which supports the bill, has previously stated its “vehement opposition” to prediction market contracts related to college sports. The Senate passed the bill on Monday and it now awaits action in the House of Representatives.
Kalshi’s lobbying on the NDAA is likely related to sections 1081, 1082, and 1083, which would ban “covered transactions” involving prediction market contracts, prevent Department of Defense personnel from trading on prediction markets, and ban all bets regarding military operations.
In addition to those three bills, Kalshi’s lobbying disclosures also reveal its focus on the CFTC, the Executive Office of the President, the Securities & Exchange Commission and both chambers of Congress.
The director of the CFTC has been explicitly pro-prediction market, both through public statements and the commission’s legal action against states attempting to regulate the platforms.
Brad Lipton, director of the Roosevelt Institute’s corporate power and financial regulation program, said the CFTC suing states is “unprecedented.”
“They’re being super aggressive, and it’s sort of a head scratcher as to why they’re being so aggressive,” Lipton said. “It’s because they’re so committed to helping out prediction markets, is really the only explanation.”
Beyond its corporate spending, Kalshi’s co-founders Tarek Mansour and Luana Lopes Lara have donated to federal political campaigns and political action committees. Mansour and Lopes Lara have collectively given about $1 million to both Democratic and Republican recipients this cycle, according to FEC filings.
Polymarket has spent $180,000 on federal lobbying in 2026, hiring Advocus Partners. Advocus is a collaborative advocacy group whose members include BGR Group, one of the leading lobbying firms. Polymarket’s lobbyists include Keaghan Ames, a former senior policy advisor at the CFTC.
Coalition for Prediction Markets brings in other other players
In December 2025, Kalshi joined Robinhood, Coinbase, Crypto.com and Underdog – which all offer exchange betting in their apps – to launch the Coalition for Prediction Markets. Polymarket is not a member.
The coalition’s bipartisan leadership includes a pair of former House members. President Sean Patrick Maloney represented New York as a Democrat before serving in the Biden administration, and senior adviser Patrick McHenry was briefly the acting speaker of the House while he represented North Carolina as a Republican.
In July, the coalition named former CFTC Commissioner Brian Quintenz as a senior advisor and has brought on a pair of lobbying firms to work at the federal level. As of its June 30, the coalition had paid $100,000 to four Invariant lobbyists and registered two Determinant lobbyists.
The coalition has also spent $50,000 lobbying in California through Redwood Public Affairs, the same lobbying firm used by Kalshi.
The coalition’s crypto members are some of the biggest political spenders in the current election cycle. Crypto.com’s parent company, Foris Dax, is the largest donor to MAGA Inc., the main super PAC supporting President Donald Trump. Coinbase is the 10th largest political donor in this election cycle.
The coalition follows a pattern of unified advocacy seen in other lines of business, much like that of the sports betting and gambling industry – which has spent millions on lobbying and industry-specific super PACs this year.
Lipton said the current battle for regulatory control of prediction markets is an “existential question” for the platforms, likely motivating their attempts to increase their political influence.
“It’s not at all clear to me that their business model can compete if they are going to comply with state law,” Lipton said. “They’re really trying to create a situation, I think, where they have enough political power to overcome the legal deficiencies in their arguments.”
