Prediction market profits are corrupting America, one public figure at a time

Kalshi’s decision this week to issue its first lifetime betting ban to disgraced former Rep. George Santos (R-N.Y.) is one more sad reminder that the surging prediction market is working hand in glove with our country’s public servants. Santos’s ban — for betting more than $17,000 on his own attendance at the 2026 State of the Union — may be the most egregious example, but it highlights a political culture in which corrupt self-dealing has become the new normal.

Last week, Kalshi issued a fine and a three-year ban against Republican congressional nominee Laurie Buckhout for betting on the outcome of her own race . She isn’t alone: Back in April, Kalshi fined and suspended three other congressional candidates for wagering on their own elections . Those are just the candidates dumb enough to get caught — analysts believe the real number of politicians using platforms like Kalshi and Polymarket is almost certainly higher.

Prediction market corruption isn’t limited to elected officials, either. Last month, the Commodity Futures Trading Commission fined White House teleprompter operator Gabriel Perez $172,000 for exploiting “ material, nonpublic information ” about President Trump’s speeches, raking in more than $107,000 on Kalshi. Prediction markets have transformed our government into a trading floor, and our so-called public servants have become its most enthusiastic brokers.

Now there’s concerning new data that suggests the moral rot of prediction markets is spreading beyond government and infecting every part of American life.

Analysis by the Roosevelt Institute found that one-quarter of the top 20 companies in the S&P 500’s Communication Services sector already use prediction market data to guide their content and programming. The financial sector also wants in on the game, with banking giant Morgan Stanley leading the way through its recent investment in Kalshi’s $1 billion Series F funding round .

Prediction markets look like an easy goldmine to so many sectors of the U.S. economy because federal regulators are asleep at the wheel. It’s no secret that prediction markets like Polymarket have wormed their way into Trump’s good graces — and lax regulation from the feds — in part by enriching Trump’s family members. Donald Trump Jr. was an early booster of Polymarket through his investment fund, 1789 Capital. Last month, the fund announced it would boost its investment in Polymarket by $300 million , vaulting the valuation of Trump Jr.’s stake in the process.

In fact, a New York Times article in January noted that prediction market competitors Kalshi and Polymarket share a common thread: Trump Jr. advises both, while also maintaining relationships with Trump officials including Commodity Futures Trading Commission Chairman Michael Selig, whose job is ostensibly to regulate those businesses.

Although Selig has proven willing to punish individuals like Perez with hefty fines, he has proven far less willing to hold companies like Kalshi and Polymarket to the same standard. In April, Selig declared an end to “ regulation by enforcement ,” effectively telling prediction markets that CFTC was more interested in helping the markets grow than in regulating how their platforms are routinely used for public corruption.

If it wasn’t clear enough that Trump Jr. speaks both for his prediction market business interests and for the White House, his recent meeting with Republican attorneys general in New Orleans should remove any doubt. In remarks that leave no room for confusion, Trump Jr. demanded GOP lawmakers stop trying to regulate prediction markets and leave policymaking to Selig’s CFTC instead. President Trump said the same thing back in May, though with less finesse: In a series of posts on Truth Social, the president lambasted state Republican lawmakers as “SCUM” for attempting to regulate prediction markets.

The message is obvious: stop threatening the flow of prediction market money into the Trump family’s bank accounts — or else.

Does anyone really expect Republicans to regulate the Trump family’s prediction market cash cow? Congressional Republicans have proven their willingness to prioritize Trump’s personal interests over the public good in nearly every case. Instead, it will fall to Democrats to host serious public hearings that explore the corrosive effect prediction markets are having on our government.

We deserve to know who in government is profiting, how much they jave pocketed, and how many of the Trump administration’s decisions have been made with the goal of putting the health of their own private investments ahead of the public they are sworn to serve. Trump’s embrace of prediction markets has turned our government into a giant casino. Restoring public faith in our public servants must be Priority No. 1 for any Democratic majority.

Max Burns is a veteran Democratic strategist and founder of Third Degree Strategies.