Kalshi, the market leader in prediction‑trading platforms, is leading a $3 million lobbying push in 2026 to ensure that its business remains regulated by the Commodity Futures Trading Commission (CFTC) rather than by state gambling laws. The effort comes as a growing number of state attorneys general argue that prediction markets are a “new form of casino” and seek to sue or ban the platforms.

Federal vs. state regulatory clash

Prediction markets have surged in popularity over the past two years, drawing both enthusiastic users and fierce critics. While the CFTC classifies the contracts offered by platforms like Kalshi as swaps—financial instruments under its jurisdiction—many states contend that the same contracts constitute gambling, which is traditionally regulated at the state level.

Judges in several federal courts have issued conflicting rulings on the issue, leaving the legal landscape unsettled and likely to reach the Supreme Court. In response, Kalshi is intensifying its lobbying both in Washington and across the states.

State‑level spending and contributions

According to OpenSecrets data, Kalshi, its rival Polymarket, and the Coalition for Prediction Markets have collectively spent at least $3 million on lobbying and campaign contributions in 2026. Kalshi alone gave $147,500 to the Republican Attorneys General Association and $170,000 to the Democratic Attorneys General Association in the first half of the year.

The company also contributed directly to several attorneys general, including the super PAC backing Texas Attorney General Ken Paxton’s Senate bid and the campaigns of Vermont’s Charity Clark, Oregon’s Dan Rayfield, and Florida’s James Utheimer. While Rayfield and Clark publicly denied any influence from the donations, Paxton’s super PAC spokesperson highlighted Paxton’s record of holding large corporations accountable.

National political ties

The New York Times reported that Donald Trump Jr., a strategic advisor to both Kalshi and Polymarket, has urged Republican state attorneys general not to oppose prediction markets. Trump Jr.’s venture‑capital firm holds an equity stake in Kalshi, underscoring the close ties between the industry and prominent political donors.

Kalshi’s federal lobbying remains robust. The company spent nearly $1 million through June 30, 2026, and hired six outside firms. The largest contractor, Miller Strategies, received $240,000; its head, Jeff Miller, served as finance chair for President Donald Trump’s second inaugural committee. Additional spending includes $120,000 to Lincoln Policy Group, founded by former Senator Blanche Lincoln, who now argues for broader CFTC authority over prediction markets.

State lobbying focus

Kalshi has registered lobbyists in 41 states, with the most significant expenditures in California and New York. In California, the firm spent $62,000 on three assembly bills and on outreach to the Attorney General’s and Governor’s offices. In New York, Kalshi increased monthly payments to Brown & Weinraub Advisors from $10,000 to $25,000 and contracted the Mirram Group for $25,000 per month through July 2027, projecting over $400,000 in state lobbying costs there.

Kalshi’s in‑house lobbyist Blake Bee, formerly with the National Association of Attorneys General, is registered to lobby the New York governor’s office and state assembly through December 2026.

Industry perspective

Benjamin Schriffin, director of securities policy at the nonprofit Better Markets, warned that many state gambling statutes were written for sports betting and casino games, not for the novel format of prediction contracts. He suggested that states may feel compelled to amend their laws to cover these emerging platforms.

Polymarket, Kalshi’s chief competitor, has not yet registered any state lobbyists, highlighting Kalshi’s aggressive approach to shaping policy.

Implications for the future

If the Supreme Court ultimately decides that prediction markets fall under state gambling law, Kalshi’s extensive state‑level lobbying could position it to influence the resulting legislation. The company’s strategy reflects a broader industry effort to preserve a uniform federal regulatory framework, which they argue provides clearer rules for innovators and protects consumers.

Kalshi’s spokesperson Dani Lever emphasized the company’s bipartisan approach, stating, “Like many U.S. regulated companies, we support candidates on both sides of the aisle.” The statement underscores the firm’s intent to work with lawmakers regardless of party affiliation to maintain a consistent regulatory environment for prediction markets.

Original reporting: KTBS 3 (Shreveport) — read the source article.