US House Lawmakers Probe Kalshi and Polymarket Over Insider Trading Concerns

US lawmakers have launched an investigation into prediction market platforms Kalshi and Polymarket following concerns over possible insider trading linked to recent military developments involving Iran. House Oversight and Government Reform Committee Chair Representative James Comer confirmed that letters had been sent to the chief executives of both companies requesting internal information on how suspicious trading activity is monitored and addressed.

The inquiry focuses on whether individuals with access to non-public government information may have used prediction markets to profit from geopolitical events.

Suspicious Iran-Related Trades Draw Scrutiny

According to Comer, more than 80 trades were reportedly placed shortly before US military actions involving Iran, raising concerns that elected officials or government insiders may have benefited from advance knowledge. The investigation also examines prediction contracts tied to ceasefire announcements, Israeli military actions and congressional elections.

Polymarket previously updated its insider trading policies earlier this year, while Kalshi announced restrictions banning some politicians from betting on their own election outcomes.

Prior Case Adds Pressure to Oversight Debate

The investigation follows an earlier criminal case involving a US soldier accused of using classified information to profit from prediction contracts linked to the capture of Venezuelan President Nicolás Maduro. Prosecutors alleged the activity generated more than $400,000 in gains, though the accused pleaded not guilty.