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Coalition Rejects Trump Admin Push to Let Kalshi, Polymarket 'Bypass State Gambling Regimes'
"We urge the commission to withdraw this proposal, enforce the rules already on the books, and return its attention to the derivatives markets it was created to protect—and which genuinely need its attention."
Jul 24, 2026
A coalition of consumer advocacy groups on Friday forcefully condemned the Commodity Futures Trading Commission's move to give prediction market platforms like Kalshi and Polymarket "a green light to bypass state gambling regimes."
Users of these platforms can bet on future events, from the outcome of a sports game to the language of a political speech, by buying "shares," or "contracts." The Trump administration claims the platforms are not gambling operations, but derivatives markets because, as Chair Michael Selig has noted, "Congress has entrusted the CFTC with the sole authority to regulate" those.
Various state leaders and organizations have pushed back, arguing that "calling a sports wager an 'event contract' does not transform it into a legitimate tool for managing economic risk," as Demand Progress Education Fund communications director Eric Naing said Friday. "The CFTC should not allow federal derivatives law to become a back door for nationwide gambling."
However, the CFTC has stuck to its position, publicly backed by President Donald Trump, who has declared that the agency must have "exclusive authority" over this "major industry," which "we must protect." The Republican—who infamously bankrupted multiple casinos—notably has a company exploring how to cash in on the sector.
The CFTC announced its proposed rules for prediction markets in March, followed by an update last month. In a Friday letter to the agency chair, Demand Progress Education Fund and 10 other organizations wrote that "we oppose the proposal in its entirety. It fails as a matter of law, as a matter of policy, and as a matter of institutional competence, and we emphatically urge the commission to withdraw it."
"When Kalshi and Polymarket launched just five years ago, they were curiosities; today Kalshi alone is valued at $22 billion and processes an annualized volume of $178 billion in trades every month," the coalition detailed. "This proposal should be understood for what it is: a green light for these immense and largely unregulated financial speculation platforms to offer sports betting nationwide and aggressively market it to the public, bypassing the community and mental health protections that states and tribal authorities have spent generations building to address the risks present in this type of speculative activity."
The fact that 89% of Kalshi's total fee revenue comes from sports-related contracts "should settle the question of whether these companies are derivatives exchanges or sportsbooks," according to the coalition, which also includes Americans for Financial Reform Education Fund, Better Markets, Center for Digital Democracy, New Jersey Appleseed Public Interest Law Center, Open Markets Institute, Oregon Consumer Justice, Oregon Consumer League, Protect Borrowers, Public Good Law Center, and Revolving Door Project.
However, the organizations also challenge the CFTC's interpretation of the Commodity Exchange Act, writing that the proposal's "framing inverts the statute's logic and Congress' intent, by treating contracts as presumptively allowed unless found contrary to the public interest through a case-by-case inquiry."
If the agency charges ahead with its current plans, "ordinary people will pay the price," the groups warned. "Expanded sports betting has increased personal bankruptcies, reduced household savings, and led to higher rates of domestic violence. Prediction markets supercharge these effects: they run 24/7 in your pocket and aggressively market to young adults, who may make low bets initially but ramp up their commitment over time. Seventy percent of users lose money, and 70% of all profits go to 0.04% of traders. Those outcomes define a casino that has figured out how to escape the regulations that casinos have to follow, like responsible gaming disclosures and financial stability protections for their customers."
"The proposal also does almost nothing to address the insider trading problem that makes prediction markets much more easily manipulated than the structures of ordinary gambling," the coalition wrote—just over a week after the White House had to address one of Trump's teleprompter operators allegedly using his access to the president's speech plans to make money on Kalshi.
The organizations further argued that "even if the commission were the right institution to police all of this, it is not capable of doing so. The CFTC, which oversees $400 trillion in US derivatives markets, has a budget frozen at $365 million... Adding nationwide responsibility for sports betting, entertainment wagering, and political gambling on top of that is not a proper expansion of the agency's mission, and it would mean that the farmers, manufacturers, and energy companies who depend on well-functioning commodity markets will pay the price."
"We urge the commission to withdraw this proposal, enforce the rules already on the books, and return its attention to the derivatives markets it was created to protect—and which genuinely need its attention," concluded the coalition. "The regulation of gambling and gaming belongs with the states and tribal authorities that have the experience, the tools, and the democratic accountability to do the job."
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Report Exposes How Trump Administration Has 'Mowed Down' Regulators Overseeing Prediction Markets
The Trump administration last week sued Minnesota after it passed a law banning prediction markets from operating in the state.
May 24, 2026
A Sunday report in The New York Times revealed how the Trump administration is using a key government agency to shut down any efforts to regulate online betting markets such as Kalshi and Polymarket.
According to the Times, the administration has stacked the Commodity Futures Trading Commission (CFTC) with industry insiders who have systematically "mowed down" staffers at the agency who have expressed interest in providing oversight on prediction markets.
Among other things, the report documented how multiple officials at CTFC have been put on leave simply for asking questions about the betting markets' ties to members of President Donald Trump's family or for having past experience enforcing regulations related to cryptocurrencies.
What's more, the Times found that even being an industry insider isn't enough to guarantee good standing in the agency. Brian Quintenz, who was tapped by Trump to lead CTFC last year, saw his nomination withdrawn after he drew the ire of Cameron and Tyler Winklevoss for refusing to support their cryptocurrency exchange's complaint against the agency.
Revelations about industry insiders rolling over regulators at CTFC come as the Trump administration is fighting any attempts by states to regulate prediction markets.
As explained in a Thursday report from CNBC, the Trump administration is "fighting a multi-front battle to stop the state actions and assert its regulatory authority," with CTFC arguing that it is "the only entity that can regulate" betting platforms.
16 different states are engaged in legal proceedings against the platforms, and Minnesota last week passed a law to ban them outright, which immediately drew a lawsuit from the administration.
The new Minnesota law, which is scheduled to take effect in August, bans prediction markets "from hosting, creating or advertising in the state," according to ABC News.
In an interview with ABC, Minnesota state Rep. Emma Greenman (D-63B) said she authored the legislation because she has grown increasingly concerned about young people in the state seeing their finances drained from placing online bets.
"We're seeing studies come out that say [the companies] are targeting 18- to 21-year-olds," said Greenman, "and we are seeing gambling starting younger and younger."
CFTC Chair Michael Selig last month warned states against trying to regulate prediction markets, which he said would "circumvent the clear directive of Congress."
"Our message to Wisconsin is the same as to New York, Arizona, and others," said Selig. "If you interfere with the operation of federal law in regulating financial markets, we will sue you."
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‘Epic Insider Trading’: Nearly $1 Billion in Crude Oil Shorts Taken Just Before Report of US-Iran Peace Deal
"Only a select few in the top tax bracket are benefiting from this, and the majority of you ain’t in it," said former Rep. Marjorie Taylor Greene.
May 06, 2026
Observers are once again raising concerns about insider trading on Wednesday after a trader took a colossal crude oil short position just over an hour before a US-Iran peace deal was reported to be on the horizon, causing prices to fall.
The Kobeissi Letter, a financial newsletter, reported on X that at 3:40 am on Wednesday, "nearly 10,000 contracts worth of crude oil shorts were taken without any major news."
This was equivalent to $920 million in notional value, which the letter described as "an unusually large trade" so early in the morning. But it would soon pay off.
At 4:50 am, just 70 minutes later, Axios published an exclusive scoop by Middle East reporter Barak Ravid that the White House believed the US and Iran were on the verge of agreeing to a one-page "memorandum of understanding" to end the war, which included more nuclear negotiations, one of the key sticking points for US President Donald Trump.
By 7:00 am, just over two hours after Axios dropped its report, oil prices had fallen by 12%, allowing the savvy investor to make $125 million in a matter of hours, which led to accusations that it was yet another example of "epic insider trading" by those in the know about Trump's plans.
Prices have since rebounded by about 8% after Iran announced the creation of the new "Persian Gulf Strait Authority," to mediate the passage of ships through the Strait of Hormuz on its terms.
The Trump administration has already been deluged with accusations that its members are using insider information to take advantage of financial markets and prediction market apps.
Last month, an active-duty US special forces soldier was indicted by the Department of Justice after he made about $400,000 betting on Polymarket that Venezuelan President Nicolás Maduro would be removed from power, a bet he allegedly placed using classified information about an operation he himself was involved with.
More bettors collected around $1 million in profits from bets on the specific timing of Trump's war with Iran in late February. The Financial Times also reported a surge of more than $580 million in oil futures trading right before Trump announced a pause in strikes on Iran's energy facilities in March.
Of course, Wednesday's bet theoretically could have been made without the aid of insider information.
The new peace framework is the latest in what has seemed to be an endless pattern over the past several weeks in which US officials tell media outlets that a peace agreement is on the horizon, causing oil prices to dip, only for it to collapse later in the week, often with Trump issuing hostile threats or making new demands.
It has become such a familiar story that some have speculated that the announcement of productive ceasefire talks is deliberately choreographed to calm oil markets and bring down prices, which have become a growing problem for Trump among voters.
But as The Economic Times explained, the bet placed Wednesday morning likely "is not a routine hedge" or "a portfolio rebalancing move."
"At that hour, in that size," it said, "a crude oil short of that magnitude is a deliberate, high-conviction directional bet."
Former Rep. Marjorie Taylor Greene (R-Ga.), a one-time Trump cheerleader who's become one of his leading critics, suggested Trump's erratic approach to negotiating an end to the war was just a tool used by him and his allies to profit.
"When is everyone going to start realizing that the on-again, off-again war/peace rhetoric is really just insider trading? And sprinkle in some murder," Greene wrote on social media. "Only a select few in the top tax bracket are benefiting from this, and the majority of you ain’t in it."
Democrats in Congress have urged the Securities and Exchange Commission (SEC) to investigate what Sen. Chris Murphy (D-Conn.) suggested could be "mind-blowing corruption" by the White House, not only related to Trump's wars, but also to his tariff regime, which has caused similar market chaos that bettors have been able to capitalize on with fortuitously timed wagers.
But critics have described profiting from the machinations of a war that has killed more than 1,700 civilians as particularly grotesque.
"This has to stop," said Fox News commentator Jessica Tarlov. "Lives on the line so they can insider trade!"
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New Bill Would Crack Down on Prediction Markets After Suspicious Bets on Maduro, Iran
"No one should be able to gamble on death and destruction, especially people connected to Trump with insider knowledge,” said Rep. Rashida Tlaib.
Mar 18, 2026
Two Democratic lawmakers on Tuesday introduced legislation that would prohibit online prediction markets from allowing bets on government actions that could be easily gamed by insiders.
The proposed Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, unveiled by US Sen. Chris Murphy (D-Conn.) and Rep. Greg Casar (D-Texas), would ban "wagering on government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome."
The lawmakers said the legislation was necessary due to suspiciously timed bets that were placed on the cryptocurrency-based prediction platform Polymarket related to imminent US military actions in Venezuela and Iran, raising concerns that Trump administration officials were using insider information to profit from life-or-death policy decisions.
The fact that the bets were placed on Polymarket is notable because Donald Trump Jr., President Donald Trump's eldest son, sits on the company's advisory board. Wired reported last year that Polymarket also received an investment from 1789 Capital, the venture capital firm where Trump Jr. serves as a partner.
Given this potential massive conflict of interest, argued Murphy, it is imperative for Congress to step in and put a stop to possible insider trades related to war and other government policy matters.
"There’s no getting around the fact that any prediction market where somebody knows or controls the outcome of a bet is ripe for corruption,” said Murphy. “Even worse, prediction markets are also an avenue by which government decisions get influenced by who's making money off them, and that should be unforgivable to the American public."
Murphy added that "when events that involve good and evil, life and death become just another financial product, morality no longer matters and the soul of America is fundamentally corrupted."
Casar said that the legislation is needed to battle the "crisis of corruption" engulfing the US government during President Donald Trump's second term.
"Too often, prediction markets are becoming yet another place for rich and powerful people to cash in on insider information," Casar said. "This bill will put a stop to that."
Rep. Rashida Tlaib (D-Mich.)—who is co-sponsoring the bill along with Sen. John Hickenlooper (D-Colo.), Rep. Yassamin Ansari (D-Ariz.), and Rep. Gabe Amo (D-RI)—said it was "sickening" to think of Trump administration insiders making money from their own acts of military aggression.
"No one should be able to gamble on death and destruction, especially people connected to Trump with insider knowledge,” Tlaib said. “Congress must ban profiting from war and war crimes."
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'Bone-Chilling': Gamblers ‘Vowing to Kill’ Journalist Unless He Changes Iran War Report to Help Them Win Polymarket Bet
“After you make us lose $900,000, we will invest no less than that to finish you.”
Mar 16, 2026
An Israeli journalist said he's received death threats from gamblers demanding he change an accurate report about an Iranian missile strike in order to help them win a bet on the prediction app Polymarket.
On Monday, Emanuel Fabian, a military correspondent for The Times of Israel, wrote that he was confused when he suddenly received several requests to correct a report on March 10 that an Iranian missile had struck Israeli territory.
Fabian said he'd based his report on information from "rescue services" as well as "footage that emerged showing the massive explosion caused by the missile’s warhead." No injuries were reported from the impact, as the missile struck an empty area outside the city of Beit Shemesh, near Jerusalem.
"What I thought was a seemingly minor incident during the war has turned into days of harassment and death threats against me," Fabian said.
Hours after posting the report to the paper's live blog, Fabian said he received an email, from a user identifying as Aviv, claiming that what had hit the ground was not a missile, but an interceptor fragment.
Fabian contended military sources had confirmed it was a missile and that the impact was far too large to have been from only an interceptor.
He then received another email from a user named Daniel with the exact same gripe. Daniel described having an "urgent request" for the report to be changed and told Fabian that by changing it, "you would be helping me, many others, and, of course, the state of Israel."
Daniel sent Fabian several more emails over the next couple of days demanding a correction, and the tone continued to grow more urgent.
"I ask again, if you could handle this as soon as possible, it would help us a lot," Daniel said on Thursday. "It’s really important, if possible, still this morning."
Other users messaged him with the same complaint over email and the messaging app Discord. It was only when Fabian received more angry replies from two more users on X that he realized what was going on.
"Checking those X accounts, both appeared to be involved in gambling on the Polymarket betting site," he explained. "As far as I now understand, the emails I received were intended to confirm whether or not a missile had hit Israel on March 10 in order to resolve a prediction on Polymarket."
Polymarket is a cryptocurrency-based prediction market where users buy and sell shares tied to real‑world events, enabling them to bet on the likelihood of future events, including those in wartime.
Fabian found that the people clamoring for his attention had put money on whether Iran would strike Israel on March 10. "This market will resolve to ‘Yes’ if Iran initiates a drone, missile, or air strike on Israel’s soil on the listed date in Israel Time (GMT+2). Otherwise, this market will resolve to ‘No’,” the website explained. However, it stipulates that intercepted missiles would not receive a "yes" verdict.
As of March 16, gamblers had wagered more than $14 million on the event.
Over the next several days, requests continued to roll in from people demanding a correction to the story.
One user presented a fabricated email, purportedly from Fabian to Daniel, stating that the Israel Defense Forces had confirmed the missiles were intercepted and that he planned to correct the story.
Fabian was later approached by a colleague at another publication, who said his friend had asked him to reach out for the story to be changed. After being confronted, the friend admitted that he had money on the wager too, and offered some of his winnings to Fabian's colleague if he could persuade the journalist to change the story.
By the weekend, the messages had become violent. Fabian said a user identified as Haim accosted him with several threatening messages in Hebrew over WhatsApp:
"You have exactly half an hour to correct your attempt at influence,” Haim wrote. "Despite the fact that you received countless inquiries—you insist on leaving it that way.”
“If you do not correct this by 01:00 Israel time today, March 15, you are bringing upon yourself damage you have never imagined you would suffer,” he threatened, in a very lengthy message.
Haim also attempted to call me via WhatsApp multiple times during the night, before sending me more messages.
“You have no idea how much you’ve put yourself at risk. Today is the most significant day of your career. You have two choices: either believe that we have the capabilities, and after you make us lose $900,000 we will invest no less than that to finish you."
Haim also threatened Fabian by referring "with specific details" to his home address, his parents, and family.
After receiving several more threats and being contacted by someone purporting to be a "lawyer," Fabian went to the police, who he said are now investigating the situation.
The threats continued into Monday, after Fabian ran into a bomb shelter amid another Iranian missile attack.
"The attempt by these gamblers to pressure me to change my reporting so that they would win their bet did not and will not succeed," Fabian said. "But I do worry that other journalists may not be as ethical if they are promised some of the winnings."
He said that journalists are in a unique position to "exploit their knowledge for insider trading on the platform."
Polymarket and other similar "prediction market" apps like Kalshi have come under similar scrutiny in the United States for allowing users to place suspiciously timed bets on military actions taken by the Trump administration.
Earlier this month, the watchdog group Public Citizen sent a letter to the chair of the Commodity Futures Trading Commission (CFTC), which regulates prediction markets, outlining a series of "highly suspicious" bets made just before President Donald Trump launched strikes against Iran on February 28. Among the big winners were what the Wall Street Journal described as "six suspected insiders,” whose immaculately timed wagers netted them a $1.2 million profit.
In January, another trader made more than $436,000 after betting that Veneuzelan President Nicolás Maduro would be removed from power just hours before Trump launched an operation to remove him.
In the face of state regulations, the Trump administration has sought to ease restrictions on betting apps. The Trump family's media company offers access to prediction markets on its Truth Social platform via Crypto.com. Meanwhile, Donald Trump Jr. is an adviser to both Polymarket and Kalshi.
US Sen. Chris Murphy (D-Conn.), who has emerged as a leading critic of prediction markets, described Fabian's account as a "bone-chilling story."
The senator said: "We need to end prediction markets for government action. NOW."
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