House Oversight Committee Chairman James Comer is launching a congressional investigation into prediction markets Polymarket and Kalshi, demanding internal records from both companies amid concerns that government employees might be using classified information to place winning bets. Comer sent letters to the CEOs of Polymarket and Kalshi this week, requesting detailed documents related to trading activity, compliance procedures, and any communications with federal workers.
The scope of the probe
The investigation targets potential insider trading on prediction platforms, where users wager on outcomes ranging from election results to economic data. Comer's committee warned that individuals with access to sensitive government information could exploit it for personal gain, undermining market integrity and public trust. The letters explicitly mention the possibility that federal employees have traded on nonpublic intelligence.
What Comer is asking for
The demands are broad. Comer wants each company to turn over internal policies for detecting and preventing insider trading, logs of trades made by government employees, and any analysis the platforms have conducted on suspicious activity. He also requested records of communications with federal agencies about market-moving events. The CEOs face a deadline to comply, though no specific date was stated in the initial announcement.
The insider trading concern
Prediction markets have grown rapidly in popularity, with Kalshi and Polymarket drawing millions of dollars in bets on political and economic events. But their real-time, anonymous nature makes them vulnerable to abuse by those with early access to privileged data. Comer's office said the probe is not meant to shut down the industry but to ensure safeguards are in place. The committee has not yet identified any specific instances of insider trading but views the risk as serious enough to warrant a full review.
The next step is for the CEOs to respond with the requested records. Whether they will comply fully or push back on the scope remains an open question.
