Congress

How prediction markets landed in Congress’ crosshairs

Published

6 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

Chip Roy is leaving Congress — but not before warning his colleagues to take the threat of AI seriously

Published

15 minutes ago

September 13, 2026

Blue Light Newsroom

Rep. Chip Roy isn’t known for his touchy-feely approach to legislating. But as the staunch conservative is preparing to leave Congress at the end of the year, he’s raising difficult, philosophical questions about whether the rapid rise of artificial intelligence could turn over human dominion to “entities that have no soul.”

The Texas Republican is grappling with how to square his small-government, anti-regulatory values with what he sees as an urgent need to bring some accountability to an industry that has answered few questions about whether the rapidly evolving technology could fundamentally change what it means to be a “free human.”

And as many of his fellow Republicans warn that regulating AI in the U.S. could cede ground to China, he keeps coming back to a nagging question: At what cost?

“All the proponents of technology will say, ’Oh, your life is better. You can do so many more things, so many advancements, curing cancer … blah blah blah.’ And I’m like, ‘yeah, but what world am I living in?’ And I think that’s a question we have to ask as we kind of work through all this stuff.”

The interview has been edited for length and clarity.

We’re speaking the day after an ex-AI researcher went on social media to issue a warning about the potential extinction threat posed by unchecked AI development. What do you think is going on here?

Everybody’s feeling like they’re losing control. They don’t know what their job’s going to look like. They don’t know what their life’s going to look like. They’re being told that we need to have all these data centers and invest in those, and whatever that means, whatever the impact is, don’t worry, it’ll be better, and there’ll be plenty of water, there’ll be plenty of electricity. But you got to do it because, “beat China?”

I’m a free market guy. I’m a limited government guy. I’m a guy that believes that the government can’t solve problems very well, but I’ve tried to have some conversations with folks about this in terms of responsibility. Is this not unlike nuclear proliferation?

Did you think you’ve had to rethink your free market inclinations at all?

None of this makes me rethink free market. The free market is the best thing you could possibly have to provide as many options as possible without government interference. However, what I want people in this space to acknowledge is, this is a unique issue. This is not the simple transition from a horse and buggy to a car. This is an earth shattering potential human replacement on multiple levels. And with no clear direction for what it means, and then ultimately no clear understanding of who’s in charge of what is supposed to be a tool for humanity — but can ultimately make humans the tools of the technology.

One researcher has put it at a greater than 10% chance that AI could end civilization. Do you take that seriously and, if so, does that mean Congress should act sooner rather than later?

I think that certainly raises eyebrows and opens eyes to, “wait, what are we talking about here?” And the biggest problem is that most of the people in the industry cannot just unilaterally deny it. They cannot answer the question of, “what does it do for the dignity of work and the ability of humans to continue to work and produce with their hands and through their own toil and production?”

At what point can the genie not go back in the bottle?

I am of the mindset that the genie cannot go back in the bottle. I am of the mindset that technology and entrepreneurs are our best hope for figuring out how to manage all of this — not government. But I do think government can provide some safety valves, right? If everything is digitized and AI is sort of running things, if everything goes sideways, what do I do? We have to be philosophical about what it means to live. Not all advancements make the world better; they make it different, and some of them do make it better, right? Was it better to grow up in the ’90s or in 2026 as a kid? I don’t know.

If your ultimate backstop as a human is that God gave us life and dominion over your world, why should I have to answer to a world that chose an AI-driven world? Why? I mean, you have to live in the world you’re in, but shouldn’t I have an option as a free human?

You’re talking about your faith — what role could Christians play here?

Do I think that there is a God question in this entire AI debate? I absolutely do. Do I think that God gave man dominion over the world, and that we owe it to ourselves and our posterity and to God to try to make sure that we maintain that dominion and not turn that over to, essentially, entities that have no soul and have no ability to understand humanity? You cannot turn leadership and decision-making over to soulless entities, and I think that that is a central question to everything that we’re going to be debating on this topic.

Do you think this will be a big issue in faith circles?

Yes. I don’t think people have caught up to it yet, but I do think that’s going to be a growing issue in faith circles, in Christian circles.

The White House’s position has largely been about the need for the U.S. to beat China.

So I’ll be honest. I don’t know what the proper role of government is here. The Big Tech bros need better answers if they want us just to all say, “oh yeah, just let the market figure it out.” Well, then give me my answers. So far the Big Tech bros’ answer has been: “but China.” And “but China” is not a policy prescription. It’s a fear mechanism.

It seems like you are really wrestling with the role of government here.

Yes. And all of us should be wrestling with it. And our predisposition as free market conservatives should be that the market is going to produce the best and most efficient and most effective solutions for all of these problems. But the people that are running the industries, they owe us an understanding that they’re doing that. Government has a role to have hearings. Government has a role to raise questions. Government has a role to maybe demand certain levels of safety or security, or maybe government has a role to demand some certain level of escape valve.

The reactions to the warnings from the AI researchers have come overwhelmingly from Democrats. Do you think we could see Republicans start to say, “oh, maybe progressives who want to ban superintelligence are right?”

I do not believe “we’re going to shut it all down” is either plausible or the best solution. I do think we must have some degree of guardrails and that the same laws and rules that apply to humans are going to have to apply to a world of AI, and there are other existential questions that have to be raised.

If you’re sitting as a red coat and a blue coat in the revolution, staring across the field, you know that if you walk out there, you’re gonna get shot, or you might get shot, and you got to be willing to risk it. And you’re risking your life. What is a robot risking? I think that’s a big deal.

Congress

Convention puts GOP’s reality on display: Midterm policy agenda is skimpy

Published

1 day ago

September 12, 2026

Blue Light Newsroom

DALLAS — Republicans used their midterm convention this week to ask voters to preserve their congressional majorities and let them “finish the job.”

But with few consensus legislative goals, it’s far from clear what job they want to finish.

The two-day convention here centered on painting Democrats as an increasingly socialist party that American voters cannot trust with power while highlighting the GOP’s one major victory on Capitol Hill under President Donald Trump’s second term: the year-old tax-cut package known as the “big, beautiful bill.”

In contrast, there was little talk from the podium of what Republicans might seek to pass with a continued trifecta, and members interviewed on the sidelines shared differing visions of what specific legislation the GOP should pursue in the last two years of Trump’s presidency.

The one concrete proposal on offer — Trump’s promise Wednesday of a $5,000 “dividend” for every American adult — blindsided GOP congressional leaders and generated immediate internal dissension.

Asked about his party’s legislative plans, Rep. Chuck Fleischmann of Tennessee said Republicans would “certainly continue the agenda that we’ve done and that we fulfill to the American people.”

“Accentuate all the positives, minimize all the negatives,” said Rep. Dan Meuser of Pennsylvania, responding to the same question. He added he would like to see “more domestic energy production” and tackling fraud in government programs.

Several others said they want to build on last year’s GOP megabill, pursuing more tax cuts and, echoing Meuser, eliminating wasteful spending in government. Some said they hoped to pursue new health care and immigration policies.

“We’ll continue to work with President Trump, making sure the border stays secure,” Judiciary Chair Jim Jordan of Ohio said in an interview. “I think we can do more on the tax code, dealing with keeping taxes low for families. Certainly … things cost too much for families. We understand it now.”

Specifics, however, were scarce.

Fleischmann said Republicans have “a good roadmap in place,” but when pressed on what that roadmap entails, he resorted to broad strokes — “to make sure that America stays strong, that defense gets funded, that we make sure that we fulfill our proper domestic obligations.”

Rather than rally around Trump’s promise of $5,000 checks if Republicans are returned to power in Congress, many GOP members — caught by surprise — said they needed more information about the proposal or simply declined to comment. Once mentioned by the president, the proposal was barely mentioned again on the convention stage.

Trump said in a CBS News interview Thursday that he believed he might not need Congress to authorize the dividend checks — a claim some Republicans quickly pushed back on.

The reality is, the narrow House and Senate majorities the GOP now holds have been barely capable of legislating as it is. And while leaders in both chambers play up the possibility of expanding those majorities in November, that would require overcoming historical precedent and many Republicans’ private expectations they will be lucky to hold on to any majority at all.

Both chambers return Monday for what could be a brief pre-election session, with little expectation that serious legislating will get done. House Republicans have sent several partisan bills to the Senate, but they are being blocked by Democratic filibusters. Plans for a new budget reconciliation bill that could skirt Democratic opposition has stalled, meanwhile, due to internal GOP divides.

The lack of action in the Senate has fueled anger from Trump and his loyalists in Congress and in the GOP voter base — much of it trained on Senate Majority Leader John Thune, who has repeatedly said he simply does not have the votes to eliminate the filibuster and enact the stalled bills.

That has not appeased angry conservatives — Thune was booed at the convention Wednesday — and a continued GOP trifecta would almost certainly continue to be marked by interchamber tensions — even with turnover in the party ranks.

“Given the current dynamic, we have got to have a serious come-to-Jesus conversation with Majority Leader Thune,” Rep. Chip Roy of Texas said at the convention, demanding the Senate “tweak the filibuster rules” and “call the question” on key bills.

Even on an issue where there is general agreement among Republicans that something should be done — such as immigration — internal disagreements have kept the party from acting.

Jordan, for instance, said he would like to codify tough border security policies backed by Trump. But some more moderate Republicans are hoping for a more comprehensive bill that also addresses legal immigration programs, such as those allowing for guest agricultural workers and high-skilled labor.

Meuser is among those wanting a broader bill — one, he said, that is “not amnesty, but a truly comprehensive, smart plan for illegal immigration.”

Speaker Mike Johnson did not mention immigration legislation or any other specific agenda items in his remarks to the convention Thursday. He instead outlined the House’s achievements under Trump and said voters need to stay the course.

“We’ve succeeded in so many ways, but it takes more than just 20 months to fix the total disaster that we were handed and to turn the ship of state around,” he said. “We know the job isn’t finished yet, but we are all in this together.”

Echoing many other convention speakers, Johnson focused on the threats posed by Democrats: “The alternative is to turn the reins over right now to the radical Marxists who are planning to dramatically grow the government, raise your taxes, drive costs through the roof, and rob you of your freedom.”

But some worried that message might not be sufficient — especially after Democrats’ 2024 message focused largely on preventing another Trump presidency rather than pointing to affirmative plans to tackle rising prices and other key voter concerns.

Roy is not on the ballot this fall after losing a primary for Texas attorney general, but he is helping to campaign for other Republicans. He, too, said his message is that GOP candidates “need to be able to finish the job” and cited an “enormous amount of good work” — listing as examples the Laken Riley Act, a small-bore immigration bill that passed early in Trump’s second term, and federal spending cuts embedded in the megabill.

As for the rest of the GOP messaging, Roy added, “Right now, I would argue we’re focused a little bit too much on how crazy they are instead of talking about all the great stuff we’ve done.”

Congress

House sets vote on Russia sanctions bill

Published

2 days ago

September 11, 2026

Blue Light Newsroom

House lawmakers are set to vote on the sweeping Russia sanctions bill that senators overwhelmingly voted to approve in August, but now faces a tough test in the House where Democrats fear the bill will give President Donald Trump too much tariff power.

The Senate-passed and White House-backed measure is finally getting consideration from the House, after GOP leaders omitted it from their agenda when lawmakers returned from August recess. Many House Democrats — including Minority Leader Hakeem Jeffries — have voiced opposition for fear that it would give Trump expansive and risky new tariff authorities.

House GOP enthusiasm for the measure has also been tepid, after a boost following the sudden death of its champion, Sen. Lindsey Graham, wore off.

The House Rules Committee scheduled a meeting to consider the bill Monday afternoon.

Advocates of the legislation argue the bill would give Trump the tools he needs to pressure Russian leader Vladimir Putin to end the war on Ukraine. The bill would issue mandatory sanctions on Russian leadership and its energy sector — as well as collaborators in Moscow’s defense industry and so-called shadow fleet.

But it would also give Trump the ability to hit top buyers of Russian oil with 100% tariffs, a move that Democrats say is dangerous given the White House’s eagerness to slap tariffs on U.S. friends and foes alike.

“Donald Trump already has ample authority to impose sanctions on the companies, individuals, and vessels propping up a Russian war machine that continues its deadly attacks on Ukraine,” Reps. Gregory Meeks (D-N.Y.) and Richard Neal (D-Mass.) wrote in a joint statement with Democratic Rep. Don Beyer of Virginia and Sens. Ron Wyden (D-Ore.) and Elizabeth Warren (D-Mass.) earlier this month. “Congress does not need to greenlight new tariff authority for the President to impose those sanctions on Russia today.”

Backers of the bill were quick to encourage its passage after the vote was announced on Friday.

“Great news that the House will vote on the much-needed Russia sanctions bill,” Senate Foreign Relations ranking member Jeanne Shaheen (D-N.H.) wrote on social media. “Ukrainian civilians continue to be killed by Putin’s war machine, and this bill hits the Kremlin’s coffers hard. Now is the time to pass it and force Putin to the negotiating table.”

The measure passed in an 86-11 vote in the Senate in August.