Prediction markets in the US are facing growing regulatory pressure as lawmakers introduce multiple bills targeting platforms like Kalshi and Polymarket.
The sector has expanded rapidly from $1.2 billion in monthly activity in early 2025 to over $20 billion annually, drawing scrutiny over potential insider trading and links to gambling.
Critics have raised concerns about bets on sensitive events, including elections, wars and sports, with some lawmakers arguing the platforms enable unfair advantages for users with inside knowledge.
Several proposed bills aim to restrict or ban event contracts, including measures targeting election betting, government actions and trades involving insider information.
The regulatory push is largely driven by Democrats, who are increasingly likely to gain control of Congress, potentially strengthening support for stricter oversight.
At the same time, the industry has backing from the Commodity Futures Trading Commission, which argues it has jurisdiction over prediction markets and is developing its own regulatory framework.
Legal battles are also intensifying at the state level, with some regulators treating prediction markets as unlicensed gambling operations and pursuing court action.
The outcome remains uncertain, but the sector faces a complex mix of political, legal and regulatory risks that could shape its trajectory over the next few years.