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Gaming Edge’s TL;DR
- Prediction market firms spent a record amount on federal lobbying in Q1 2026 as regulatory scrutiny in Washington intensifies.
- This spike – more than 60% higher than Q1 2025 – signals a high-stakes fight over who will regulate products that increasingly overlap with sports betting and derivatives.
The prediction market industry reported $1.84 million in federal lobbying spending in Q1 2026. The record quarterly topped last year’s spending, by 60% .
The surge reflects activity from native prediction platforms and incumbent sports betting operators that have launched prediction products.
Major players include Kalshi – which opened a D.C. office and hired Democratic strategists – Coinbase, Crypto.com, Robinhood, DraftKings, and FanDuel. A new trade group, the Coalition for Prediction Markets, led by a former congressman, has emerged to coordinate positions. Polymarket, which has maintained a low-profile in Washington, is also building a physical presence, even testing a downtown D.C. pop-up to engage policymakers.
Prediction markets now a priority for lawmakers
Ronak D. Desai at Paul Hastings told Bloomberg the landscape has shifted quickly.
“Prediction markets have moved from the periphery to the center of congressional scrutiny.”
More than a dozen bills this year seek to constrain or reclassify these platforms, while state regulators and the casino industry argue they may be operating as unlicensed gambling venues.
The industry is pushing to remain under the Commodity Futures Trading Commission – a regulator that applies derivatives rules and is viewed as a lighter-touch option compared with state-by-state gambling frameworks.
If lawmakers or regulators force prediction markets into state gambling regimes, platforms could face new licensing, taxes, consumer-protection mandates, and geographic restrictions that limit product availability.
Operators would see higher compliance costs and likely slower product rollouts; those costs could be passed to users via fees, reduced market offerings, or tighter limits.
Mainstream entrants like DraftKings and FanDuel mean wider distribution and liquidity for bettors today, but increased scrutiny could narrow allowable event types (notably political contracts), change KYC/AML requirements, and alter how prices and odds are presented. In short, bettors may get stronger consumer protections – at the potential expense of market variety and ease of access.
Based on reporting by Finance Magnates for TradingView.
