Prediction markets are pouring money into Washington to defend against escalating criticism that their fast-growing platforms are contributing to a gambling explosion and enabling insider trading.

Leading online platform Kalshi, alongside crypto and sports gambling companies that have launched their own prediction markets, are hiring teams of lobbyists as Congress eyes a crackdown on the multibillion-dollar industry.

Together, the companies spent at least $1.84 million on lobbying during the first quarter of 2026. That’s a record amount, up more than 60% from the $1.1 million the industry spent during the same quarter last year.

Prediction markets, which have exploded in popularity over the last year, are now handling billions of dollars in trades every week. By last December, the industry was generating $2 billion in annual revenue, an amount forecast to soar to $10 billion by 2030, according to analysts at Citizens Financial Group Inc.

And with that growth comes regulatory scrutiny.

“The policy landscape has rapidly evolved just in the last two or three months,” said Ronak D. Desai, a partner at Paul Hastings focused on investigations and white collar defense. “Prediction markets have moved from the periphery to the center of congressional scrutiny and scrutiny by other state officials.”

Lawmakers have introduced more than a dozen bills since the start of the year to regulate prediction markets, which allow online users to bet on issues ranging from geopolitical events to sports.

The impending legislative fight has prompted a lobbying bonanza, spanning Washington’s influence industry from traditional white-shoe lobbying firms to specialized MAGA shops wired within President Donald Trump’s administration.

“Right now, prediction markets are the advocacy topic du-jour,” said Cody Carbone, chief executive officer of crypto lobbying group Digital Chamber, which entered the fray with a working group it set up at the request of member firms that have entered the market or are preparing to do so.

A growing number of Democratic lawmakers, and some Republicans allied with religious conservatives or representing casino-centric states, are pressing to subject prediction markets to the same regulations as gambling.

They’re joined by officials in some states, who are seeking to regulate prediction markets like casinos in their states. That would require the companies to apply for state licenses, and pay extensive state taxes.

Additionally, suspicions of insider trading have been fueled by reports anonymous traders have made hundreds of thousands of dollars placing bets on military actions such as the U.S. attack on Iran and the abduction of former Venezuelan leader Nicolas Maduro.

The industry is fighting back hard. Executives at Kalshi and other prediction markets have argued they should remain under the jurisdiction of the light-touch Commodity Exchange Act rather than be forced to adhere to state-by-state gambling laws. Commodity Futures Trading Commission Chairman Michael Selig has joined firms in fighting state regulatory efforts.

Kalshi, which dominates the predictions market in the U.S., is leading the pack on lobbying for the industry. The company has registered two new lobbying firms since the beginning of the year: Resolution Public Affairs, which has close ties to Senate Minority Leader Chuck Schumer, and Squire Patton Boggs, a global lobbying powerhouse.

The company in 2024 hired Lincoln Policy Group, which is led by former Arkansas Democratic Senator Blanche Lincoln, who helped write the commodities law that Kalshi argues regulates its practices.

Other Kalshi lobbyists include Republican fundraiser Jeff Miller and former Democratic aide Jed Bhuta.

Seeking to expand its influence with Democrats, Kalshi in early April also hired veteran political consultant Stephanie Cutter, a former adviser to President Barack Obama.

The company launched its first Washington-focused public relations campaign last month with bright green ads plastered all over the city. “We Don’t Do Death Markets,” read one, seeking to distinguish Kalshi’s platform from competitors that allow betting on deaths.

Polymarket’s disclosed lobbying operation is paltry in comparison to Kalshi’s. With few staff in Washington, Polymarket does not report having any in-house lobbyists. Only two registered lobbyist disclose working on its behalf — former Trump adviser David Urban and former CFTC senior policy adviser Keaghan Ames. Polymarket did not respond to requests for comment about its Washington presence.

But both companies have one key ally in common: presidential son Donald Trump Jr., who has invested in Polymarket through his venture capital firm and is a strategic adviser for Kalshi.

DraftKings and FanDuel, sports gambling companies that launched their own prediction market platforms last December, have also ramped up lobbying operations. FanDuel spent $380,000 on lobbying so far this year, up about 58% from the first quarter of last year. The company registered its own in-house lobbyists for the first time in January of this year, including a former aide to House Majority Leader Steve Scalise and a former lobbyist for the National Football League.

DraftKings during the first quarter of this year spent $290,000, up 29% from the same period last year. Signaling an increased interest in prediction markets issues, DraftKings last month hired lobbyists that specialize in the CFTC, including former CFTC Chairman Jim Newsome.

Prediction markets are also confronting an adversary with its own powerful and well-established Washington lobby: the casino industry.

Casino owners consider the exchanges direct competition and argue they should be subject to gambling rules and taxes across the country.

The fight is on in Congress. Democratic and Republican lawmakers are assembling evidence and making preparations for investigations into potential insider trading on the platforms, according to two people familiar with their plans.

“It’s a safe bet that resources in both chambers are currently being expended for possible investigations into this, especially with relation to issues like the Iran war,” said Desai, the white-collar defense attorney.

Yet former Democratic Representative Sean Patrick Maloney — who is co-leading a prediction markets lobbying coalition that includes Kalshi, Crypto.com, Coinbase, Robinhood and Underdog — argues that lawmakers should recognize many of their constituents are already enthusiastic customers.

“Sometimes, Washington is the last place that people join the conversation,” Maloney said.

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