Congress Investigates Betting Sites for Government Insider Trading

Congress is investigating two popular betting websites where people can bet on real-world events, worried that government employees might be cheating using secret information.

The investigation targets Polymarket and Kalshi, two platforms where users can bet money on things like election outcomes, policy decisions, and world events (these are called "prediction markets" - like sports betting but for news events).

Rep. James Comer, who leads a powerful congressional committee, believes government workers might be using classified information (secret government knowledge) to make "huge profits" by betting on events they already know will happen. Think of it like betting on a football game when you already know the final score - that's cheating.

Here's what Congress wants to do: • Investigate how widespread this problem might be • Get internal records from both companies • Pass new laws banning government employees from using these betting sites • Protect national security from potential risks

Comer explained on CNBC: "Members of Congress, people in the president's administration, any government employee could use basic insider knowledge and make huge profits on anything government-related."

This investigation shows growing concern about prediction markets, which have exploded in popularity. While these platforms can help predict future events, lawmakers worry they create opportunities for corruption when people with inside information can profit from what they know.

The probe could lead to strict new rules about who can participate in prediction markets, especially for anyone working in government who might have access to non-public information.

This is an AI-generated summary. Read the original article at: https://www.coindesk.com/policy/2026/05/22/congress-probes-polymarket-and-kalshi-over-fears-government-employees-are-trading-on-secret-info