US Senators Probe Kalshi and Polymarket Over Election Bet Manipulation

The integrity of US prediction markets is under intense scrutiny as a bipartisan pair of senators launched a formal investigation into Kalshi and Polymarket. Senator Elizabeth Warren (D-Mass) and Senator John Curtis (R-Utah) sent a joint letter to CEOs Tarek Mansour and Shayne Coplan, expressing deep concerns over the potential for insider trading and market manipulation. The lawmakers are specifically targeting "election-related event contracts," which have seen a surge in popularity but also a rise in controversial trading activities by political insiders.

This congressional move follows several high-profile incidents where candidates involved in active races were found to be trading on their own success. The senators expressed doubt that these platforms could maintain fair markets without more rigorous oversight. They are demanding transparency regarding how these companies handle material nonpublic information and what specific steps are being taken to prevent participants from skewing the odds in their favor.

Numbers and facts

One of the most documented cases involves Mark Moran, a former Democratic Senate candidate from Virginia. In November 2025, Moran requested Kalshi to list his name on a prospective candidate market. Shortly after, he placed a $100 bet on his own campaign. The fallout was significant. While Kalshi initially proposed a $800 fine and a one-year suspension, the penalties were drastically increased after Moran refused to issue a public statement acknowledging the breach. The final disciplinary action included a five-year ban and a fine totaling $6,229.30.

According to records from the Commodity Futures Trading Commission (CFTC), this was not an isolated event. Another incident in 2025 involved a candidate trading on his own candidacy, which only came to light because the individual posted videos of the activity on social media. The senators also referenced alleged manipulation during the 2024 presidential election. They have now set a deadline for Tuesday for both companies to provide a comprehensive list of all insider trading instances referred to the CFTC and a description of active safeguards.

Background

The conflict centers on whether prediction markets function as legitimate hedging tools or as unregulated gambling dens. The senators pointed out that Kalshi's own enforcement record highlights the inherent risks of contracts tied to political outcomes. In their letter, they stated clearly:

"We remain skeptical that your companies can sufficiently police these event contracts with effective scrutiny and meaningful accountability." - Elizabeth Warren and John Curtis, US Senators

Moran, speaking on a podcast, questioned why the platforms even allowed him to register and bet using his own driver's license if their compliance systems were effective. He characterized the increased fine as a punitive measure designed to make the company look tough on enforcement while failing to prevent the core issue of insider participation.

Why it matters for German players

For residents in Germany, this situation underscores the strict protective measures of the State Treaty on Gambling 2021 (GlüStV 2021). Unlike the evolving and often chaotic market in the US, Germany does not permit betting on political events. All operators licensed by the Joint Gambling Authority of the States (GGL) are restricted to sports betting on actual athletic competitions. German players are protected by a mandatory 1,000 Euro monthly deposit limit across all platforms via the LUGAS system and a 1 Euro per spin limit on virtual slots. Engaging with unlicensed offshore platforms to bet on US elections is not only illegal but also leaves players without the legal recourse and player protection standards guaranteed by the GGL whitelist.

What it means for GGL-licensed casinos

GGL-licensed operators can view this US investigation as a validation of the conservative regulatory approach in Germany. The issues faced by Kalshi demonstrate the extreme difficulty in monitoring markets where participants can influence the outcome they are betting on. German operators must remain vigilant in ensuring their offerings stay strictly within the GGL-approved whitelist categories. By excluding high-risk event betting like political races, the German market maintains a focus on consumer safety and integrity, avoiding the legal and reputational risks currently plaguing US-based prediction exchanges. The outcome of the Warren-Curtis probe could further discourage European regulators from opening the door to political wagering.