Kalshi recruits Trump's former aides to form a lobbying army!
Casino operators open fire first, and Polymarket is targeted by Congress on the same day

Kalshi Supported Prediction Market Initiative Organization Americans for Fair Markets (AFM) officially established on 5/22, with former White House Deputy Chief of Staff Taylor Budowich serving as Strategic Advisor, aiming to promote a federal prediction market regulatory framework and counter lobbying efforts by gambling operators. On the same day, House Oversight Committee Chairman James Comer announced an insider trading investigation into Kalshi and Polymarket.
(Background summary: Prediction markets — Taiwan again blocks Polymarket website, nine-in-one election betting crackdown)
(Additional background: Prediction market ban signals! Massachusetts judge orders Kalshi to cease sports betting participation)

Key Summary

• Kalshi establishes AFM advocacy organization, with ex-White House Deputy Chief of Staff Budowich as advisor, fighting against casino industry lobbying
• On the same day, Rep. Comer launches insider trading investigation into Kalshi and Polymarket, demanding records by 6/5
• Recent storms at Polymarket: $600K hack, Korean review initiation, Taiwanese user arrests, Minnesota legislation bans

The prediction market industry is facing dual pressures: one side is lobbying for influence, the other is regulatory compliance response. On 5/22, both battles are underway simultaneously.

Kalshi announced the formation of Americans for Fair Markets (AFM), bringing in former White House Deputy Chief of Staff Taylor Budowich as Strategic Advisor. Budowich previously managed White House communications, speechwriting, and cabinet affairs under Susie Wiles, leaving in September last year.

Kalshi Government Relations Head John Bivona stated:

> "Millions of Americans have already expressed their desire for a regulated, open, and fair prediction market."

Casino operators strike first, Kalshi team retaliates

AFM’s formation was aggressive, with an organization called FairPredicts spending six figures on advertising days ago, launching a public opinion campaign against Kalshi in Washington, D.C. The backer is the American Gaming Association, led by former New Jersey Governor Chris Christie.

FairPredicts set up a website called KalshiLies.com, prompting Kalshi to issue a cease and desist letter.

By 2026, Kalshi has spent nearly $500k lobbying Congress and the CFTC. AFM claims to be "well-funded," with the mission to oppose "monopoly-protecting and lying interest groups," advocating for federal regulation of prediction exchanges, supporting bans on insider trading, and opposing markets related to war, terrorism, death, or assassination.

The core issue in this lobbying battle is regulatory jurisdiction: should prediction markets be under the CFTC or under state gambling regulators? The answer determines their fate entirely.

After the 2026 midterm elections, will the Democrats control the House?
Yes 81% · No 20%

View full market & trade on Polymarket

Polymarket Update: Hacked, Investigated, Banned

On the same day AFM was formed, House Oversight Committee Chairman James Comer announced an insider trading investigation into Kalshi and Polymarket, sending letters to both CEOs demanding internal records on user verification, suspicious transaction monitoring, and offshore market access controls by 6/5.

The immediate trigger was the case of U.S. military veteran Gannon Ken Van Dyke: he used confidential intelligence from the Venezuela President Maduro’s arrest operation to profit over $400k on Polymarket, and was indicted on 4/24. Additionally, over 80 Polymarket users in the U.S. and Israel placed bets hours before Iran military actions were announced, with highly suspicious timing.

Polymarket’s recent storms include more than insider trading. On 5/22, their UMA CTF Adapter smart contract was attacked, with $5,000 worth of POL drained every 30 seconds, totaling losses over $600k. Korea’s Broadcasting Communications Review Committee also officially launched an investigation on the same day, examining whether Polymarket violated anti-gambling laws, potentially making Korea the ninth country to ban the platform. In Taiwan, users have already been awakened by search for election betting pools during the nine-in-one elections.

At the state level, Minnesota signed the nation’s first law banning prediction market operations on 5/19, with the Trump administration immediately filing a lawsuit. Currently, 13 states have taken active enforcement or litigation positions against prediction markets.

While one side is forming lobbying groups to push for compliance, the other side’s congressional investigation letters are already on CEOs’ desks. The industry’s pace of regulatory compliance seems unable to keep up with the speed of being targeted.

Frequently Asked Questions

What is Americans for Fair Markets (AFM)?

AFM is a prediction market advocacy organization supported by Kalshi, with former White House Deputy Chief of Staff Taylor Budowich as strategic advisor. It advocates for prediction markets to be regulated by the CFTC, supports banning insider trading, opposes markets related to war and assassination, and fights against lobbying by gambling interests.

What regulatory investigations are Polymarket and Kalshi facing?

The House Oversight Committee launched an insider trading investigation on 5/22, demanding internal records from both CEOs by 6/5. The trigger was the case of U.S. military veteran Van Dyke, who used confidential intelligence to profit over $400k on Polymarket and was indicted; additionally, over 80 users are suspected of betting early on military actions.