Prediction markets reshape election discourse and draw scrutiny
Updated
Updated · CBS New York · May 6
Prediction markets reshape election discourse and draw scrutiny
11 articles · Updated · CBS New York · May 6
In Georgia's nationally watched GA-14 runoff, Kalshi and Polymarket drew millions in wagers, with Polymarket reporting more than 413 million bets and over $100 million tied to political outcomes.
Experts say the platforms can translate sentiment into clearer win probabilities than polls, but may also discourage turnout, miss complex electorates and create openings for manipulation or insider-informed betting.
Kalshi earlier barred politicians, campaign staff and some government employees from betting on US elections, while unresolved disputes involving states and the CFTC leave the legal framework unsettled.
Can regulators stop insiders from using classified information to win big on political betting markets?
Are prediction markets a truer voice than polls, or a new way to corrupt democracy for profit?
Insider Trading Scandals in Prediction Markets (2025–2026): National Security Risks and Regulatory Overhaul
Overview
Between 2025 and 2026, a series of insider trading scandals rocked prediction markets, highlighted by U.S. Army Master Sgt. Gannon Ken Van Dyke's use of classified information to profit on Polymarket. These cases exposed serious national security risks and eroded public trust, prompting the U.S. Senate to ban members and staff from such markets. In response, the CFTC launched landmark enforcement actions and proposed new regulations, while Congress introduced bills to curb insider trading and clarify legal boundaries. The resulting federal-state jurisdictional clash created a fragmented regulatory landscape, forcing platforms like Kalshi and Polymarket to adopt divergent strategies. Despite ongoing challenges, the industry is moving toward stricter oversight, technological safeguards, and a narrower focus on less sensitive markets to rebuild trust and ensure survival.