House Oversight Committee Chairman James Comer (R-Ky.) requested records from Kalshi and Polymarket Friday as part of a congressional investigation into potential insider trading on prediction market platforms. The requests escalate growing bipartisan scrutiny over whether traders may be using nonpublic information to profit on prediction market platforms.
The May 22 letters ask Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan to provide documents by June 5, saying internal platform records are the “only means” to identify bad actors and determine whether the companies are meeting their legal obligations. Comer’s letters used measured language, saying a “growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary.” But in a CNBC interview Friday, Comer was far more blunt, suggesting prediction markets are an underregulated industry that may require new federal rules.
“It’s the Wild West. There are no rules,” Comer said on Squawk Box. “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 this has never been a problem until a few months ago.”
Comer also said the insider trading enforcement gaps came into sharper focus after the recent arrest of a U.S. Army master sergeant accused of using classified information about the operation to capture Venezuelan President Nicolás Maduro to win more than $400,000 on Polymarket.
Those concerns are now driving a congressional push for internal platform records. The requests cover identity verification, geographic restrictions, suspicious trading monitoring, personal data practices and contracts tied to sensitive real-world events. The letters do not say the records have been subpoenaed, but Comer previously said that route would be used if companies do not comply.
The requests follow a letter from Rep. Chris Pappas (D-N.H.) and six other House Democrats, who asked Comer last week to open an investigation and subpoena records tied to suspicious trading. The lawmakers said public trading data can show questionable activity, but internal platform records are needed to identify the people behind the trades.
Records sought on identity checks and suspicious trading, Kalshi responds
Comer’s news release announcing the investigation said lawmakers want to examine whether users of Kalshi and Polymarket “potentially are using nonpublic information to engage in insider trading.” The committee said the records are intended to assess how the companies verify domestic and foreign users, enforce geographic restrictions and monitor suspicious trading activity.
“The Committee on Oversight and Government Reform is examining the use of online prediction market platforms by some users to conduct insider trading,” Comer wrote in the letters. “Specifically, we 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.”
The Kalshi and Polymarket letters ask for documents covering Jan. 1, 2024, to the present, including the “criteria, thresholds, or algorithmic tools” the platforms use to flag suspicious trading patterns, including trades that may involve nonpublic or classified information.
Both letters ask for account records, trading records and suspicious activity flags tied to two specific categories of markets: U.S. or Israeli military operations in Iran and the U.S. military operation to capture Maduro, including Maduro and Venezuela-related contracts.
The letters also seek documents on the companies’ referral procedures for notifying the Justice Department, the Commodity Futures Trading Commission or other law enforcement and regulatory agencies about suspicious activity. Kalshi’s letter specifically asks for records showing how many suspicious activity referrals have been made and how they were resolved, “including disciplinary matters involving political candidates,” while Polymarket’s letter asks for the number and outcome of referrals since Jan. 1, 2024.
In response to news of Comer’s request, Kalshi’s head of communications, Elisabeth Diana, touted the company’s integrity monitoring systems and said it was looking forward to cooperating.
Comer says prediction market rules could start with government officials
Comer said on CNBC that Congress may be able to find agreement on a narrower first step by restricting members of Congress, government employees and administration officials from trading on prediction markets.
“I think it wouldn’t be too much to ask to say, ‘Members of Congress can’t participate in the prediction markets, nor can government employees or people in the president’s administration,’” Comer said.
He said any legislation may also need to address consulting by people with access to nonpublic information. Comer gave a hypothetical example in which a member of Congress tells a friend about a pending indictment, allowing the friend to profit from a prediction market trade and provide some kind of under-the-table kickback.
“You’re gonna have to have tight language where you can’t even consult or give tips or anything like that,” Comer said.
Comer also grouped prediction markets with cryptocurrency and AI, suggesting these newer sectors may follow a familiar pattern in Congress, with growing concern about risks but disagreement over the shape of federal rules.
“You’ve got cryptocurrency, AI, and the prediction market, all relatively new things where there’s overwhelming agreement in Congress that there needs to be regulatory framework(s),” Comer said. “There’s just not agreement on how.”
Prediction market scrutiny becomes more bipartisan
The House Oversight request is also another sign that prediction market scrutiny is becoming more bipartisan in Congress.
Democrats have led many of the recent congressional efforts to investigate or restrict prediction markets, including the Pappas letter that pushed Comer to seek internal platform records. But Comer’s move puts a prominent Republican committee chairman behind the investigation, and his CNBC comments show at least some Republican appetite for new federal rules.
Republican concern was also visible at a Senate Commerce subcommittee hearing this week, where prediction markets became a central focus of a broader discussion about sports betting and gaming integrity. Subcommittee Chair Marsha Blackburn (R-Tenn.) said prediction markets raise concerns because they can function like sports betting without the same state-level safeguards, while Sen. Ted Cruz (R-Texas) also questioned whether sports event contracts are meaningfully different from sportsbook wagers.
