Rep. James Comer (R-Ky.), chair of the House Oversight and Government Reform Committee, launched a formal investigation into prediction market platforms Polymarket and Kalshi on May 22, announcing on CNBC's Squawk Box that government employees may be exploiting classified information to make "huge profits" on policy, geopolitical, and national security events.
In letters sent Friday to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour, Comer demanded internal records on three operational areas: identity verification processes, geographic access enforcement, and detection of suspicious trading patterns. He signaled that legislation could follow, specifically to bar members of Congress, administration officials, and other federal employees from participating in prediction markets.
"There's a concern now that members of Congress, members of the president's administration, any type of government employee, can use basic insider knowledge and make huge profits on anything government-related," Comer told CNBC. "So we want to not only launch an investigation to see how widespread this has been thus far, but also to prove a case that we've got to pass some type of legislation."
The investigation surfaces on the back of two concrete cases. The Department of Justice charged U.S. Army Special Forces soldier Gannon Ken Van Dyke with placing bets on Polymarket — earning more than $400,000 — using classified information about Operation Absolute Resolve, the mission that resulted in the capture of former Venezuelan President Nicolás Maduro. In April, Kalshi separately fined and suspended three congressional candidates from Minnesota, Texas, and Virginia for betting on the outcomes of their own elections.
The structural concern extends beyond individual bad actors. Nicolas Vaiman, co-founder of onchain intelligence firm Bubblemaps, told CoinDesk his team identified 80 bets on Polymarket with a 98% win rate — a result he called "statistically impossible." Vaiman's broader warning: if that pattern is visible on-chain to a domestic researcher, it is equally visible to U.S. adversaries.
The House probe lands in a compressed week of congressional scrutiny. A Senate Commerce Committee hearing on Wednesday saw Chair Ted Cruz (R-Texas) attack prediction markets over sports cheating scandals, while Sen. John Hickenlooper (D-Colo.) accused platforms of "preying on our young people." That bipartisan pressure is now reinforced by the Oversight Committee's formal document demand.
Both platforms face the same CFTC framework that governs prediction markets and formally prohibits insider trading — but regulators and lawmakers have acknowledged that framework has not kept pace with the sector's growth. Sector volumes hit $51 billion in 2025; Bernstein projects $240 billion in 2026 and $1 trillion by 2030. Polymarket operates on blockchain infrastructure and is incorporated in Panama; Kalshi operates as a CFTC-regulated exchange and said in a statement it has implemented "comprehensive" safeguards.
The two-week deadline for document production will determine whether the probe escalates into enforcement referrals or stays in the legislative lane. What is already clear is that the sector's compliance architecture — built for a niche derivatives market — is now under review as a national security question, not just a consumer protection one.
Reporting based on CoinDesk (coindesk.com/policy/2026/05/22), NPR (npr.org/2026/05/22/g-s1-123820), BBC (bbc.com/news/articles/c20832yg5p2o), CNBC (cnbc.com/2026/04/22/kalshi-insider-trading-congress.html), and ABC News (abcnews.com/US/doj-arrests-soldier-made-400000-betting-maduros-removal).