House Oversight Panel Investigates Kalshi and Polymarket Over Insider-Trading Risks

The House Oversight Committee has opened an investigation into prediction-market platforms Kalshi and Polymarket amid concerns they could be used for insider trading. Chair James Comer said on CNBC's "Squawk Box" on Friday that he has sent letters to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour seeking internal materials on identity verification, geographic restrictions, and systems for detecting anomalous trading. The requested documents are due by June 5. The inquiry comes as lawmakers sharpen scrutiny of prediction markets following several high-profile episodes, including allegations that a U.S. soldier profited from classified information and reports of congressional candidates wagering on their own races. Comer said access to company records is needed to determine whether users are trading on nonpublic information and whether the platforms are adequately enforcing legal safeguards. He added that the investigation is intended to support legislation that would bar government employees and members of Congress from participating in these markets. Prediction markets have expanded quickly in recent years, allowing users to bet on outcomes tied to elections, sports, policy decisions and entertainment awards. Their growth has also intensified concerns among lawmakers and regulators that people with privileged government information could use the platforms for personal gain. Kalshi has faced separate criticism after political candidates were found betting on their own campaigns on the platform. In April, the company suspended three congressional candidates linked to those wagers. Bipartisan lawmakers are pressing for tighter oversight, and several bills in Congress target insider trading and other risks associated with online betting platforms. Comer's probe also follows a request from Democratic lawmakers led by Rep. Chris Pappas urging the Oversight Committee to subpoena prediction-market companies.