Election bets drew $3bn, now face a Democratic crackdown

Bipartisan letters from Warren & Curtis on insider trading predate the vote & may outlast party control.

The hit

Prediction markets got the 2026 US midterms right, & that accuracy is now fuelling calls for a crackdown. Kalshi’s race favourite won 479 of the first 487 contests decided, according to Kalshi data. Democratic senator Jeff Merkley & Representative Maxine Waters are preparing legislative action against the platforms, according to Politico.

Why it matters

Control of Congress just shifted to the party most critical of these markets, raising the odds of hearings & new rules. Election contracts drove the volume & the backlash; war & terrorism contracts draw less attention but are central to lawmakers’ moral objections. Bipartisan letters from Warren & Curtis on insider trading may prove harder for the platforms to shake off than partisan criticism.

The record

Kalshi’s priced odds of a Democratic House majority	93%-94.5% (Kalshi)
Kalshi’s priced odds of a Democratic Senate majority	73.5%-76% (Kalshi)
Combined election-contract trading volume	over $3bn across Kalshi & Polymarket
Kalshi’s share of that volume	over $2.5bn

What happens next

Watch for whether Merkley or Waters introduces specific legislation, whether congressional committees schedule hearings on prediction markets, & how Kalshi & Polymarket respond to the insider trading questions.

Sources: ‘The new crypto’: Democrats’ wins set prediction markets up for new scrutiny · Kalshi-Polymarket Democrats scrutiny midterms

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