House Oversight Committee Chairman James Comer is demanding information from the CEOs of Kalshi and Polymarket over accusations the prediction markets have allowed insider trading to run rampant.
Internal records “are the only means by which bad actors can be identified and to determine whether platforms are meeting their legal obligations,” the Kentucky Republican wrote in a letter sent Friday to Polymarket CEO Shayne Coplan that was obtained by CNBC.
A similar missive was sent Friday to Kalshi CEO Tarek Mansour, too.
In the letters, Comer ordered the execs to send company documents by June 5 detailing how they verify identities, enforce geographic restrictions and flag unusual transactions.
“There’s a concern now that members of Congress, members of the president’s administration, any type of government employee, can use basic insider knowledge and make huge profits on anything government-related,” Comer told CNBC Friday.
The goal is not only an investigation to uncover insider trading, “but also to prove a case that we’ve got to pass some type of legislation,” he added. “And I think it wouldn’t be too much to ask to say members of Congress can’t participate in the predictions market, nor can government employees or people in the president’s administration.”
A spokesperson for Kalshi said the company is “proud of our comprehensive protections against insider trading” and they “look forward to engaging with the Committee and its members.”
A spokesperson for Polymarket told The Post the platform “maintains a comprehensive market integrity framework.”
“We look forward to engaging with Chairman Comer and the committee on how our platform is a pioneer in transparency,” the spokesperson added.
The White House in March warned staffers not to use insider information to place bets on prediction markets.
“All federal employees are subject to government ethics guidelines that prohibit the use of nonpublic information for financial benefit. However, any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible reporting,” White House spokesman Davis Ingle told The Post when asked for comment about Comer’s probe.
It comes as controversial prediction market platforms have faced backlash for allegedly allowing insiders to win big on bets linked to the Iran war and other political events.
In February, activity surged on Polymarket as suspected insiders made more than $1 million from contracts tied to the US-Israeli airstrikes on Iran — including an alleged $550,000 windfall related to the killing of Iranian Supreme Leader Ayatollah Ali Khamenei.
And last month, a US soldier was charged with using classified information to rake in more than $400,000 from Polymarket bets around the timing of Venezuelan dictator Nicolás Maduro’s capture.
The Commodity Futures Trading Commission is reportedly investigating a batch of oil and energy trades worth more than $800 million that were made just moments before Trump halted strikes on Iranian infrastructure in March.
Kalshi is an American prediction market based in New York City and regulated by the CFTC. Unlike Polymarket, its policies bar people from placing bets anonymously.
Kalshi also forbids contracts related to war and death — which became a key point of contention earlier this year when it refused to pay out $54 million to users who bet Khamenei would be “out” as supreme leader ahead of his death.
In April, the company suspended three congressional candidates who used the platform to bet on their own races, a violation of its insider trading protections.
Polymarket’s main trading platform is located offshore. Though it has offices in the US, its international operations are not overseen by American regulators. It has a limited US product that is subject to CFTC regulations.
Amid rising public scrutiny, both companies have announced tightened insider trading protections this year.
Comer’s investigation follows a letter from seven Democratic lawmakers, led by Rep. Chris Pappas (D-NH), who urged the Oversight Committee to subpoena the prediction platforms.
Earlier this year, after accusations of illicit bets linked to the February strikes on Iran, Sen. Chris Murphy (D-Conn.) introduced legislation to ban insider trading on prediction markets.
“It’s insane this is legal. People around Trump are profiting off war and death. I’m introducing legislation ASAP to ban this,” he stated at the time.
Rep. Mike Levin (D-Calif.) also blasted the February bets, writing: “When this person bought in, the market had this at a 17% probability. They turned roughly $87,000 into over half a million dollars overnight.”
“Prediction markets cannot be a vehicle for profiting off advance knowledge of military action. We need answers, transparency, and oversight.”
Levin also noted that Donald Trump Jr. sits on Polymarket’s advisory board and that the Justice Department and CFTC scrapped active investigations into the prediction market soon after his dad returned to the Oval Office. The presidential scion is also an adviser to Kalshi.
Many US states that have passed laws regulating sports gambling platforms in recent years are now arguing that prediction markets should abide by the same regulations.
Trump’s former acting chief of staff Mick Mulvaney has launched Gambling Is Not Investing, a group looking to crack down on prediction markets, specifically those with sports contracts.
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