Congress

How prediction markets landed in Congress’ crosshairs

Published

7 months ago

April 1, 2026

Lawmakers are quickly coming to a realization: Odds are, Congress is going to have to do something about booming prediction markets.

The online platforms where people can bet on the outcomes of future events like elections, sports and the Oscars had already attracted attention in Washington as the industry garnered backing from Wall Street giants, Silicon Valley investors and even Donald Trump Jr.

That scrutiny has exploded in recent weeks, however, after unusual trading patterns around markets related to the U.S.-Israel war with Iran suggested possible insider profiteering. The result has been an uptick in legislation targeting the industry amid new questions about the policing of its major players.

At the center of the fight is a debate over who should regulate and tax transactions that take place on sites like Kalshi and Polymarket, which operate as financial exchanges but have become best known as sports and political betting platforms. The clash pits states and tribes against an increasingly powerful new industry that has won over key presidential appointees.

Lawmakers of both parties are also eyeing various ways to crack down on insider trading on the platforms — including by members of Congress themselves and their staffs.

“There seems to be a growing consensus that the status quo is unsustainable,” said Rep. Ritchie Torres, a New York Democrat who was an early entrant into Congress’ prediction market debate.

The platforms, once considered niche, are poised to get new scrutiny across Capitol Hill this year. Senate Commerce Committee members have discussed holding a hearing focused on the industry, according to four people granted anonymity to discuss the private conversations. The House Agriculture Committee, which oversees commodities trading, has been holding bipartisan briefings on the issue, with more expected.

Discussions about the industry largely haven’t reached the GOP leadership level on Capitol Hill, where bigger clashes such as the Department of Homeland Security funding fight have taken precedence. Asked about banning elected officials from trading on prediction markets, Senate Majority Leader John Thune said he “hadn’t thought about that” and said he’d “take a look at it.”

House Minority Leader Hakeem Jeffries — after referencing the markets’ high odds that Democrats would win the midterms — told reporters last week it was “reasonable for us to take a look at what can be done in this space and to try to find a bipartisan path forward.”

Washington is getting a crash course on the prediction markets just as the companies have broken out from obscurity to become one of the hottest areas of investment — thanks in part to President Donald Trump, whose regulators have allowed them to offer a larger menu of wagers to their customers.

Kalshi and Polymarket, which operate the largest prediction market platforms, have recently snagged mammoth valuations and inked partnership deals with everyone from BLN and CNBC to Major League Baseball. Kalshi is federally regulated by the Commodity Futures Trading Commission, a small but powerful financial watchdog. Polymarket is best known for its larger offshore prediction market, which is not regulated by the CFTC, but the company is also pushing into the U.S. with a separate, regulated venue.

Congress’ interest is rising as the fight over industry regulation plays out in the courts. State officials from Arizona to Massachusetts have argued that the prediction markets should be subject to the same rules as traditional sportsbooks and casinos. But the companies have rejected those claims, arguing that they are exclusively overseen by the CFTC. Attorneys following the legal fight expect it to eventually reach the Supreme Court.

A bipartisan group of lawmakers is backing the states’ push to regulate the platforms. Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah) have introduced legislation that would ban CFTC-regulated entities from offering products that resemble sports betting or casino games.

They are echoing concerns from state and tribal officials who say prediction markets are threatening critical tax revenue and usurping state-level consumer protections for sports bettors. Notably, Senate Agriculture Chair John Boozman (R-Ark.), whose panel oversees the CFTC, has expressed concerns about sports betting on the sites.

“What I would like to see is an economic purpose in regulated derivatives markets,” said Rep. Bill Foster (D-Ill.). “Anything that has no economic purpose, I think, should be taxed like gambling, regulated like gambling.”

The prediction market companies are fighting back, saying that the so-called events contracts they offer are sophisticated financial products — not a form of gambling. They have key allies in the fight, including Trump’s CFTC chair, Mike Selig — who, like the companies, says the agency has “exclusive jurisdiction” over prediction markets. GOP senators including Dave McCormick of Pennsylvania and Bill Hagerty of Tennessee have applauded Selig’s posture on the issue.

But esoteric arguments about the nature of gambling have only gotten so much traction in Congress. What has instead galvanized public attention is the specter of insider trading — including possible profiteering from government officials with foreknowledge of geopolitical events such as the U.S. military intervention in Venezuela or the administration’s strikes in Iran.

Possible insider bets related to the war in Iran have spurred several new bills. Reps. Nikki Budzinski (D-Ill.) and Adrian Smith (R-Neb.) introduced bipartisan legislation last week to ban members of Congress and executive branch officials from participating in prediction markets related to policy decisions and political events.

That bill has attracted support from a handful of House Democratic and GOP lawmakers, and a bipartisan group introduced similar legislation in the Senate. The Coalition for Prediction Markets, which has Kalshi as a member, endorsed the legislation soon after introduction.

But there are even broader efforts afoot. Rep. Alexandria Ocasio-Cortez (D-N.Y.) has called for stricter regulations on prediction markets, comparing them to the tobacco industry. And Sen. Chris Murphy (D-Conn.) and Rep. Greg Casar (D-Texas) are aiming to entirely ban a wide range of prediction market trading, including anything predicated on government actions or any event “where an individual knows or controls the outcome.”

The CFTC has already promised to go after insider trading on the prediction markets, and both Kalshi and Polymarket recently unveiled new measures designed to head off the improper use of inside information on their platforms.

Kalshi also recently rolled out ads across Washington highlighting that it blocks insider trading on its platform and bans trading directly related to war and deaths. Polymarket has also expanded its presence in Washington — most notably with a pop-up bar on K Street.

“Prediction markets are an emerging technology, yes, but they’re not all the same, and we want to highlight those big distinctions,” Kalshi spokesperson Elisabeth Diana said. A Polymarket spokesperson declined to comment.

If Congress does take action on the issue, it will end up with the Agriculture panels, currently led by Boozman in the Senate and Rep. G.T. Thompson (R-Pa.) in the House. Thompson promised “bipartisan hearings and member meetings” on prediction markets in a recent interview.

“It definitely is a focus,” he said. “I don’t know what the conclusion will be.”

But Republicans could be put in a tough spot as prediction market legislation gains momentum. The Trump family has had close ties to prediction markets: Donald Trump Jr. is an adviser to Kalshi and Polymarket, and Trump’s social media company announced last year plans to create Truth-Predict, a new prediction market service.

Some Democrats are skeptical Republicans will actually move to address the issue given the Trump family’s ties and their overall friendliness to the firms.

“I don’t think the Republican-led House or Senate will seriously take this on,” Sen. Jeff Merkley of Oregon said.

Jordain Carney contributed to this report.

Congress

Democrats want Mullin in the hotseat in the next Congress

Published

1 day ago

October 23, 2026

Blue Light Newsroom

A top priority for Democrats if they get more power in Congress in November: Forcing the Trump administration’s controversial and unpopular immigration crackdown back in the headlines.

And one of the people they plan to go after hard is Homeland Security Secretary Markwayne Mullin — the former lawmaker who was brought into the role in part because he was seen as someone who could play well with Congress, unlike former DHS Secretary Kristi Noem.

A House Democratic aide said that committees plan to look at how DHS under Mullin has failed to deploy body cameras to many immigration agents, allowed dismal conditions at immigration facilities and failed to cooperate with the department’s Inspector General.

“He owns that,” the aide emphasized. They were granted anonymity to speak freely about evolving legislative preparations ahead of November.

Other Democrats plan to take him to task over the Oct. 12 ICE raid on the D.C. residence of Rep. Ilhan Omar (D-Minn.).

Even if Democrats are only able to issue subpoenas and produce reports, that could be enough to force DHS back into the headlines — undermining a major goal of Mullin’s: Keeping unpopular immigration enforcement operations away from public attention.

That would likely worsen the political pains the White House is experiencing on immigration. Voters in both parties have soured on the president’s ambitious immigration crackdown after a series of controversies, including the deaths of several American citizens following encounters with immigration officers.

“We will investigate the administration weaponizing DHS against Americans, its out-of-control immigration policies, and its blatantly corrupt self-dealing. The American people expect nothing less, and we will deliver,” said Rep. Bennie Thompson (D-Miss.), who is poised to chair the House Homeland Security Committee in the next Congress.

While Democrats want to investigate the full breadth of the Trump administration’s immigration policies, including changes to immigration courts and efforts to throttle legal immigration to the United States, multiple aides and lawmakers told Blue Light News that much of the action on Capitol Hill will center around deportations that appear to have happened without due process, aggressive practices in arrests and conditions at detentions facilities.

Democrats also plan to review how DHS has spent a historic influx of funds from a series of reconciliation bills — including controversial purchases of jets for use by Noem, warehouses intended to operate as detention facilities and other department acquisitions that may have benefitted administration allies.

As part of this push, they plan to also pull in a raft of lower-level and former officials for testimony.

At a Monday press conference in Long Beach, California, Rep. Robert Garcia (D-Calif.), the top Democrat on the House Oversight Committee, stressed that investigations into “abuses of ICE and DHS” will rank high among committee priorities — alongside investigations into the Trump family’s business dealings, disgraced deceased sex trafficker Jeffrey Epstein and “corporate corruption.”

“What has been happening is horrific,” Garcia said. “But folks like Stephen MIller, Donald Trump and the horrific people they have in power to do this harm think they can get away with frankly these crimes and this inhumanity … you will be held accountable, you will be held investigated.”

“There is no moving forward without justice,” he added.

Other potential House committee chairs are also homing in on immigration enforcement as a top area for immediate congressional oversight after the midterms. The Senate Homeland Security and Governmental Affairs Committee, as well as the House and Senate Judiciary committees also have jurisdiction over immigration operations. Aides say the incoming chairs of all of these committees are planning on working together to conduct oversight of DHS.

“This is a team sport,” said the House Democratic aide. “One of the Democratic campaign’s overwhelming themes has been accountability, and committees have an appetite to do more oversight work. So this is going to be a multicommittee effort.”

That said, the number of committees that are planning immigration investigations could result in a morass of similar probes if House Democratic leadership fails to manage committee chairs with differing priorities and personal styles. Republicans already experienced this during the Biden administration, when the chairs of the House Judiciary and Oversight committees did not clearly coordinate in their oversight of immigration policy and often held similar hearings with limited results.

Much of Democrats’ final approach will depend on the outcome of the midterm elections. While it is expected that Democrats will retake control of the House, if they also take back the Senate they could exert even more pressure on the administration by throttling the confirmation of nominees and leverage more resources for investigations.

But even just Democratic control of the House, which is seen in Washington as an all but certain outcome, would give Democratic committee chairs the ability to issue subpoenas for administration officials to testify before their committees and produce documents of import for committee investigations. The House could also always move to impeach the president and other top officials, though Democrats across the party’s ideological divides have for now ruled out a third impeachment of Trump, since it would likely fail to secure enough Republican Senate votes to result in his removal from office.

In a statement, the Department of Homeland Security said that “political attacks will not deter DHS from carrying out its lawful mission.”

“Congressional oversight should not be used as a vehicle to obstruct the department’s ability to secure the border, remove dangerous criminal aliens, disrupt transnational criminal organizations, and defend the homeland,” DHS added.

House Democrats also plan to focus on Noem’s tenure. Garcia confirmed in an interview on MS Now last week that his committee will be scrutinizing her tenure, even though she and former DHS adviser Corey Lewandowski have both left the department.

But many Democratic lawmakers are incensed about actions taken under Mullin’s tenure, including the raid on Omar’s residence.

“We are going to drag Markwayne Mullin into the Judiciary committee and give him the full Jack Smith treatment as a result of these raids,” Rep. Sydney Kamlager-Dove (D-Calif.), a member of the House Judiciary Committee, said in an interview earlier this month on MSNow, referring to the former special counsel who led federal prosecutions against Trump.

Her comments indicate that some Democratic lawmakers want to make a spectacle out of Mullin. Republicans regularly dragged Smith to testify before congressional committees as they sought to tar investigations into the president’s alleged criminal conduct.

Democrats are also eager to use their subpoena and investigative powers to compel testimony from White House deputy chief of staff Stephen Miller, who wields considerable influence over the administration’s immigration policy, and border czar Tom Homan, who is accused of taking a cash bribe from a major government contractor.

White House spokesperson Lauren Bis said in a statement that “Democrats have no agenda to improve the lives of Americans — their only agenda is to continue to demonize ICE law enforcement and continue their decade long witch hunt against President Trump and his administration.”

Homan has repeatedly denied any wrongdoing.

Oversight work is a hallmark of divided government, especially since the party in control of Congress is often unlikely to secure presidential support for major pieces of messaging legislation. But parties have at times squandered those opportunities.

Committees are trying to put resources in place ahead of the elections to speed up this work, since investigations inherently take time as staff interview witnesses and pursue relevant documents and records. As the midterm elections approach, Democrats poised to lead committees with relevant jurisdiction over the Department of Homeland Security have begun staffing up in anticipation of a change in control of Congress.

New Hampshire Democrat Sen. Maggie Hassan, is poised to take the gavel of the Senate Homeland Security and Governmental Affairs Committee should her party prevail in November. Hassan, who already began probing contracting decisions at DHS from her more limited perch as the top Democratic senator on the Joint Economic Commission, is hiring staff and preparing to continue her oversight work atop the Senate Homeland Security panel in the next Congress.

For now, House Democrats — mainly Garcia and Rep. Jamie Raskin of Maryland, who is poised to take over the Judiciary Committee — are vowing they will coordinate their efforts and work together.

“We view this as a responsibility that belongs to every committee and every member of congress … this is just an overwhelming mountain of corruption and authoritarianism that we face,” Raskin said.

Congress

John Barrasso to campaign with Ken Paxton

Published

1 day ago

October 23, 2026

Blue Light Newsroom

Senate Majority Whip John Barrasso will campaign with Ken Paxton next week in Texas as Republicans work overtime to try to hold onto the endangered seat.

Barrasso said in an interview that he plans to join a bus tour with Paxton, who is locked in a tossup battle with Democrat James Talarico despite Donald Trump carrying Texas by roughly 14 percentage points two years ago.

The No. 2 leader, Barrasso is the most senior Senate Republican to hit the trail in Texas in the general election. Senate Majority Leader John Thune has held fundraisers with Paxton but has not publicly campaigned with him.

Barrasso also plans to campaign with former Rep. Mike Rogers in Michigan and Rep. Andy Barr in Kentucky. He was also in South Carolina this week with Trump and said he had made stops in Iowa, Ohio and Kansas — all home to battleground Senate races.

Republicans are navigating steep headwinds as they try to fend off Democratic momentum and voter dissatisfaction to keep their majority. But Barrasso said he was “very optimistic” that the party would keep control of the Senate.

“There’s a lot of energy at every event I’ve gone to, and of course there are eight, 10 races now, a number for sure, that are within the margin of error,” Barrasso said. “So there’s a lot at stake in the next week and a half, and nothing’s going to be left on the field.”

He said races for Democratic-held seats in Michigan, Minnesota and New Hampshire are still within the GOP’s grasp. But Republicans are also on defense in states like Kansas, Iowa and Texas where Trump won easily in 2024.

Republicans have poured hundreds of millions of dollars into Texas to boost Paxton, even as some in the party lament some of the campaign decisions he’s made.

“I mean, I hope Ken Paxton wins. … But you know, Ken Paxton also has some responsibility here to be a better candidate and to raise some of his own money and to not be a drain on the system,” Sen. Kevin Cramer (R-N.D.) said in an interview Thursday. “Having said all that, I hope he’s a senator.”

Democrats are now pushing into even deeper red territory, including South Carolina and Mississippi. Barrasso, in the interview, said that he was “very confident” that Republicans would hold both states, which have seen an influx of late spending.

“You know the president has really opened up his campaign coffers, and he’s fully invested time as well as money,” Barrasso said. “Every candidate wishes there were more resources, every candidate, so there’s no surprise there, but we feel we’re fully resourced to get … the message out.”

Congress

Capitol agenda: Bennie Thompson warns about Dems’ late bet

Published

1 day ago

October 23, 2026

Blue Light Newsroom

National Democrats finally went into Mississippi this week, putting over $1 million behind Scott Colom‘s campaign to unseat Sen. Cindy Hyde-Smith.

To the state’s most prominent Democrat, it was welcome — but too late.

“Anything is appreciated, and I don’t want to seem like people here are not appreciative. But you know, we’ve been singing this song for almost a year,” Rep. Bennie Thompson said in an interview. “Scott is a quality candidate and he could’ve benefited from early recognition from the Senate Majority PAC and others.”

Thompson’s sentiments reflect ongoing frustration among some Democrats who have been beating the drum for more national investment in Black candidates in races once seen as long shots that are now anything but.

“Mississippi people are ready for a new direction. They’re ready to fire Cindy Hyde-Smith. They want somebody that’s going to actually look out for our state, and it’s great that the country is starting to realize that,” Colom said in an interview.

The sentiments were also echoed by Florida Democrat Angie Nixon, who is on her own quest to defeat incumbent GOP Sen. Ashley Moody.

Nixon, referring more broadly to national Democratic donors, said the party needs to do more in her state, and stat.

“I can win. I’m going to win. We just need people to really lean into this moment right now,” she told Dasha Burns in the latest episode of The Conversation.

Neither the Democratic Senatorial Campaign Committee nor Senate Majority PAC has publicly announced a Florida television buy on her behalf, but Nixon was clear that the DSCC has been “very helpful” recently, opening up doors to connect her with donors and having her participate in fundraisers with DSCC head Sen. Kirsten Gillibrand and Minority Leader Chuck Schumer.

“They are now seeing that this seat is actually winnable,” Nixon said.

Colom has also been a part of DSCC fundraisers and Schumer has directed donors to him.

The Senate Majority PAC declined to comment. DSCC spokesperson Maeve Coyle said Nixon and Colom are running “inspiring and energetic campaigns” and that her group is “committed to expanding the map as much as possible” despite limited resources and a flood of Republican money.

But Thompson argued that party leaders need to move much faster in the future to invest early in strong candidates who can mobilize the large populations of Black voters in Southern states that others deem unwinnable.

“The South in general is ripe for Democrats, but it has to be a sustained investment,” he said. “Given the loyalty that the African American population gives to the Democratic Party, it is just an ideal opportunity to grow the party and ultimately get some Democrats elected.”

“But,” he added, “that engagement can’t come two weeks or less before the general election.”

What else we’re watching:

— DEMOCRATS’ LOOMING TRADE BATTLE: Cracks in Democrats’ trade policy are starting to emerge within the party, even as candidates are presenting a united front on repealing Trump’s tariffs on the campaign trail. The simmering debate over how far to reject Trump’s trade agenda cuts across geography and ideology. It’s likely to bubble into public view in the coming months as Democrats prepare to assume more power in Congress and jump into the wide-open upcoming presidential primary.

— DEMS WANT MULLIN IN HOTSEAT: A top priority for Democrats if they get more power in Congress in November: Forcing the Trump administration’s controversial and unpopular immigration crackdown back in the headlines. And one of the people they plan to go after hard is Homeland Security Secretary Markwayne Mullin — the former lawmaker who was brought into the role in part because he was seen as someone who could play well with Congress, unlike former DHS Secretary Kristi Noem. A House Democratic aide said that committees plan to look at how DHS under Mullin has failed to deploy body cameras to many immigration agents, allowed dismal conditions at immigration facilities and failed to cooperate with the department’s Inspector General.

Adam Wren, Daniel Desrochers and Eric Bazail-Eimil contributed to this report.