The top Republican on the House Committee on Oversight and Government Reform announced Friday that the panel is launching an investigation into prediction market companies Kalshi and Polymarket over allegations of insider trading and exploiting regulatory loopholes.Rep. James Comer (R-KY) said lawmakers are examining the “adequacy of company safeguards to prevent access to offshore sites to circumvent compliance with applicable U.S. federal regulations governing prediction market platforms,” in a Friday letter sent to Kalshi CEO Tarek Mansour.Prediction markets, online platforms where users can bet on the outcomes of events ranging from elections to sports and geopolitical events, have drawn increasing scrutiny in Washington as lawmakers rush to determine how to regulate the rapidly growing technology industry.
In the letter, the committee requested documents and information related to how Kalshi verifies the identities of domestic and international users, enforces geographic restrictions, and monitors suspicious trading activity that could indicate insider trading across its global platform.
Comer cited several alleged examples of insider trading activity tied to prediction markets. According to the letter, California gubernatorial candidate Kyle Langford allegedly placed a $200 wager on his own race on Kalshi. Three other politicians reportedly placed bets tied to their own elections earlier this year.
