The US House Oversight Committee plans an investigation into the largest prediction market platforms over suspicions that government employees could be exploiting classified information for personal gain.
Rep. James Comer, R-Ky., chairman of the House Committee on Oversight and Government Reform, is analyzing the internal records of Polymarket and Kalshi CEOs to determine whether government employees are using inside knowledge to benefit from geopolitical and military policies and operations, he said Friday on CNBC’s Squawk Box.
“There is now concern that members of Congress, members of the president’s administration, any type of government employee, can use basic insider knowledge and make huge profits on anything related to government,” Comer told CNBC.
“So we not only want to start an investigation to see how widespread this has been so far, but also show that we have to pass some type of legislation,” Comer added. “And I think it wouldn’t be too much to ask to say that members of Congress can’t participate in the prediction market, nor 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 rein in 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 anomalous trading activity.
Prediction markets, which have grown in popularity in recent years, have come under 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 volumes could peak at about $1 trillion by 2030, as the sector evolves from niche betting to broad-based “information markets” spanning sports, cryptocurrencies, politics and economics, according to a report from Wall Street broker Bernstein in April. Volumes reached $51 billion last year and could reach around $240 billion in 2026.
The House investigation follows a heated US Senate Commerce Committee hearing on Wednesday, where lawmakers from both parties scrutinized prediction market platforms such as Kalshi and Crypto.com. Senate Commerce Chairman Ted Cruz (R-Texas) criticized the industry for allowing cheating scandals in 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 companies’ aggressive marketing on social media of “taking advantage of our young people” and fueling problem gambling.
Nicolas Vaiman, co-founder and CEO of on-chain 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 watch market predictions can spot irregular transactions, so can America’s enemies. He and his team found 80 bets on Polymarket with a 98% win rate, which he says is statistically impossible to achieve. “Not even luck can explain those victories.”
